Investment Banking Project 




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1) Primary Market :

 - The primary market is where securities are created, while the secondary market is where those securities are traded by investors.
 -   In the primary market, companies sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).
 -The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time.   
 - An initial public offering, or IPO, is an example of a primary market.
-An IPO occurs when a private company issues stock to the public for the first time.
 -The important thing to understand about the primary market is that securities are purchased directly from an issuer.

2) Secondary Market :
 
-The secondary market is basically the stock market and refers to the New York Stock Exchange, the Nasdaq, and other exchanges worldwide.
-For buying equities, the secondary market is commonly referred to as the "stock market."·         The defining characteristic of the secondary market is that investors trade among themselves.
- That is, in the secondary market, investors trade previously issued securities without the issuing companies' involvement. For example, if you go to buy Amazon (AMZN) stock, you are dealing only with another investor who owns shares in Amazon. Amazon is not directly involved with the transaction. 

3) Preffered Stock :

- Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders.
- Preferred shareholders have priority over common stockholders when it comes to dividends, which generally yield more than common stock and can be paid monthly or quarterly
-  Preferred stockholders have limited rights which usually does not include voting
- Preferred stockholders claim on assets is greater than common stockholders but less than bondholders.
- If shares are callable, the issuer can purchase them back at par value after a set date
- Some preferred stock is convertible, meaning it can be exchanged for a given number of common     shares under certain circumstances. 
-The board of directors might vote to convert the stock, the investor might have the option to convert,   or the stock might have a specified date at which it automatically converts. Whether this is   advantageous to the investor depends on the market price of the common stock.

4) Common Stock :
  -Common stock represents shares of ownership in a corporation and the type of stock in which most        people invest.
  - When people talk about stocks they are usually referring to common stock. In fact, the great majority stock is issued is in this form.
   -If a company does well, the value of a common stock can go up. But keep in mind, if the company       does poorly, the stock's value will also go down.
   -   Preferred shares can be converted to a fixed number of common shares, but common shares don't         have this benefit.
   -Common stockholders are last in line for the company's assets. This means that when the company         must liquidate and pay all creditors and bondholders, common stockholders will not receive any             money until after the preferred shareholders are paid out.

      5) Equity |:
       
       -One of the benefits of trading in the share market is that investors can become partial owners of a     company. These shares, offered by companies in return for money, are called equities. In the Indian     stock market, equities are available for trading at the National Stock Exchange (NSE) and the Bombay   Stock Exchange (BSE).
       -An equity market, also known as the stock market, is a platform for trading in company shares. It is  the place where buyers and sellers meet to trade in listed companies. Listed companies are those entities that have offered some part of their equity to public investors.

      6) Commodity Trading :
         -   Commodities, whether they are related to food, energy or metals, are an important part of everyday life.
-        - Anyone who drives a car can become significantly impacted by rising crude oil prices. The impact of a drought on the soybean supply may influence the composition of your next meal.·        It used to be that the average investor did not allocate to commodities because doing so required significant amounts of time, money and expertise. Today, there are several routes to the commodity markets, some of which facilitate participation for those who are not even professional traders
      -Types of Investment Commodities : Metals (such as gold, silver, platinum, and copper) , Livestock and Meat (including lean hogs, pork bellies, live cattle, and feeder cattle) , Agricultural (including corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar)
     -Grains and other agricultural products have a very active trading market. They can be extremely volatile during summer months or periods of weather transitions. Population growth, combined with limited agricultural supply, can provide opportunities to ride agricultural price increases
      -A popular way to invest in commodities is through a futures contract, which is an agreement to buy or sell a specific quantity of a commodity at a set price at a later time. Futures are available on every category of commodity
      - Commodities can quickly become risky investment propositions because they can be affected by uncertainties that are difficult, if not impossible, to predict such as unusual weather patterns, epidemics, and disasters both natural and man-made

       7) Order Types :
 
           A.     Market Order 
                 - A market order simply buys or sells shares at the prevailing market prices until the order is                    filled.
                 -A market order is the most basic type of trade. It is an order to buy or sell immediately at the                  current price. Typically, if you are going to buy a stock, then you will pay a price at or near the                posted ask. If you are going to sell a stock, you will receive a price at or near the posted bid.
                 -The advantage of using market orders is you are guaranteed to get the trade filled; in fact, it                    will be executed ASAP.

          B. Limit Order 
-              -  A limit order, sometimes referred to as a pending order, allows investors to buy and sell                          securities at a certain price in the future. 
                 This type of order is used to execute a trade if the price reaches the pre-defined level; the order                will not be filled if price does not reach this level. In effect, a limit order sets the maximum or                minimum price at which you are willing to buy or sell.

     - Buy Limit Order :

       A buy limit order is an order to purchase an asset at or below a specified price, allowing   traders to control how much they pay.

           By using a buy limit order, the investor is guaranteed to pay that price or less   If the asset does not reach the specified price, the order is not filled and the investor may miss out on the trading opportunity. Said another way, by using a buy limit order the investor is guaranteed to pay the buy limit order price or better, but it is not guaranteed that the order will be filled.

 -Sell Limit Order :

         An order to sell a security at or above a specified price. To ensure improved price, the order must be placed at or above the current market ask.

          C. Stop-Loss Order :

               -The order specifies that an investor wants to execute a trade for a given stock, but only if a                       specified price level is reached during trading.

                    Stop-loss orders differ from a conventional market order. With market orders, the investor            specifies that they wish to trade a given number of shares of a stock at the current market-         clearing price. Using a market order, the investor cannot specify the execution price.                   However, the stop-loss allows an investor-specified limit price.    The trade executes once the       price of the stock in question falls to a specified stop price. Such orders are designed to limit       an investor’s loss on a position.

      D. Stop-Limit Order :

        -The stop-limit order will be executed at a specified price, or better, after a given stop price has                been reached.

     -- Once the stop price is reached, the stop-limit order becomes a limit order to buy or sell at the limit price or better.

E. Immediate or Cancel (IOC) :

- An IOC order mandates that whatever amount of an order that can be executed in the market (or at a limit) in a very short time span, often just a few seconds or less, be filled and then the rest of the order canceled. If no shares are traded in that "immediate" interval, then the order is canceled completely.


8) How to Buy/Sell Stocks :

       -In order to buy stocks, you need the assistance of a stockbroker since you cannot usually just call up a company and ask to buy their stock on your own. For inexperienced investors, there are two basic categories of brokers to choose from: a full-service broker or an online/discount broker.

    -Full-Service Brokers (Financial Advisor) : These are the traditional stockbrokers who will t  ake the time to get to know you personally and financially. By getting to know as much about     you as they can, these full-service brokers can then help you develop a long-term financial plan.

    - Online/Discount Brokers(Third party Applicatons) : Online/discount brokers, on the other hand, do not provide any investment advice and are basically just order takers. They are much less expensive than full-service brokers since there is typically no office to visit and no certified investment advisors to help you. If you feel you are knowledgeable enough to take on the responsibilities of managing your own investments or you don't know anything about investing but want to teach yourself, then this is the way to go.


 9) Mutual Fund :

 -  A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.

      -Mutual funds are operated by professional money managers, who allocate the fund's assets and     attempt to produce capital gains or income for the fund's investors.

      - Mutual funds invest in a vast number of securities, and performance is usually tracked as the     change in the total market capital of the fund—derived by the aggregating performance of the     underlying investments.

       -Mutual funds charge annual fees (called expense ratios) and, in some cases, commissions, which   can affect their overall returns.

       -The overwhelming majority of money in employer-sponsored retirement plans goes into mutual funds.


 10) Investing :

    -    The goal of investing is to gradually build wealth over an extended period of time through the buying and holding of a portfolio of stocks, baskets of stocks, mutual funds, bonds, and other investment instruments.



























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