Mahek and Markets

                                            Options   An options contract is a financial agreement between two parties that gives the holder (the buyer) the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (the strike price ) within a specified time frame or on a specific expiration date. There are two main types of options contracts: Call Option : A call option gives the buyer the right to buy the underlying asset at the strike price before the contract expires. Buyers of call options typically expect the price of the asset to rise. Put Option : A put option gives the buyer the right to sell the underlying asset at the strike price before the contract expires. Buyers of put options typically expect the price of the asset to fall.   Key terms associated with options contracts: Premium : The price paid by the buyer to th...

                                                                    Futures Futures and options (F&O) are  derivative products in the stock market . Since they derive their values from an underlying asset, like shares or commodities, they are called derivatives. Two parties enter a derivative contract where they agree to buy or sell the underlying asset at an agreed price on a fixed date. A futures contract is a legal agreement to buy or sell a commodity or financial instrument at a set price and time in the future. Futures contracts are a type of derivative contract, and are often used as a hedge investment.   Here are some key features of futures contracts: Standardized Futures contracts have a standardized size, which can vary by product. For example, one contract for crude oil may represent 1...

                                                    Risk Management System isk management in investment banking is  a systematic process that helps banks identify, evaluate, and reduce the potential impact of risks on their business . It's a core component of internal control in the investment banking industry.   Here are some steps in the risk management process: Identify risks : Banks analyze the types of risks they may face, such as credit, market, operational, liquidity, compliance, and strategic risk. Assess risks : Banks evaluate the likelihood and potential impact of each risk using both qualitative and quantitative methods. Measure risks : Banks quantify the potential impact of risks in financial terms to prioritize responses and allocate resources. Mitigate risks : Banks implement strategies to reduce or control ris...

                                                            Know Your Customer Know Your Customer (KYC) is  a legal requirement for financial institutions and businesses to comply with anti-money laundering (AML) laws . KYC is a critical part of the fight against money laundering and terrorist financing.   KYC involves a number of steps to establish a customer's identity, understand their activities, and assess the risk of money laundering:   Verifying a customer's identity using documents like a passport, voter's ID, or driver's license   Verifying a customer's face   Verifying a customer's address using documents like utility bills   Using biometric verification   Assessing the source of a customer's funds   KYC is a fundamental practice to protect an organization from fraud and losses. F...

                                   Anti Money Laundering Anti-Money Laundering (AML) is  a set of laws, regulations, and practices that aim to detect, prevent, and report financial crimes, especially money laundering . AML is often combined with Combating the Financing of Terrorism (CFT) to form AML/CFT.   AML is important because it helps protect the financial system and financial markets. Money laundering is the process of making money from illegal activities seem legitimate, such as by hiding the origins of funds from drug trafficking, human trafficking, or other crimes. AML helps to uncover this money.   Here are some things to know about AML: How AML works AML rules help to detect and report suspicious activity, such as securities fraud or market manipulation.   How criminals launder money Criminals use layering to separate criminal funds from their source, a...

                                                    Trade Life Cycle The trade life cycle in investment banking is the process of a financial transaction from start to finish.  It is a series of steps that ensure a trade is executed and verified by all parties involved.  The trade life cycle is important for the legitimacy of financial markets Trade Life Cycle is carried out by three levels: 1:Front Office. 2:Middle Office. 3:Back Office. where Front Office performs the task of: A-Trade Initiation B-Trade Execution C-Trade Capture. Middle Office Carries out: D-Trade Enrichment E-Trade Validation F-Trade Verification. Back Office is assigned the task of: G-Trade Settlement H-Trade Reconciliation I-Trade Regulatory Reporting.