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Do Not Overestimate Your Skills With Financial Leverage

Friday, August 25th, 2017 | Author: Kredent | Category: blog Finance


  leverage trading There are several reasons why forex and CFD traders fail on the market, the most frequent one is due to a poorly used leverage.It is vital to learn how to handle leverage properly in order to achieve steady profits. Most novice traders underestimate the impact that wrongly used leverage can have on their capital. It is more than easy to completely destroy your financial funds if you do not have enough experience with the leverage.

With great power comes great responsibility


Leverage can work for us as well as against us. The leverage is a strong tool which usage has to be learned. Thanks to it we can earn loads of cash even with a relatively small capital. However, we can not forget how risky the use of leverage can be. Learning how to trade forex or CFDs with leverage is not a simple task and it takes its time. Most of the time will be probably spent on a practise demo account on which you can not earn a single penny. The results, however, will be in the end definitely worth it.

Beginner traders – Be careful here


Do not get all excited about the big leverage that brokers advertise in the attempt to attract new clients. 1:20 is the biggest leverage that beginning traders should use. Or they should trade even without it. Traders who have got enough experience can take advantage of a bigger leverage. When you are choosing a forex or CFD broker do not worry about the fact that it might not offer sufficient leverage. Because that almost never happens and advanced traders know that trading with huge leverage is not the best thing to do even tho they have the capital for it.

What brokers welcome and want from traders


Most brokers offer big leverage with a small minimum deposit. They try to compete with one another who can make forex and CFD more attractive for a new group of people. The majority of traders who already have got experience in trading either already trade somewhere or they have rather decided to quit this tough business. And because brokers need a constant increase in a number of new clients they provide the opportunity to trade to almost anybody.

And with the tempting offer to enter the place where many millionaires were born, good amount of people will get attracted by a low min. deposit requirements and by a big leverage that should make those huge earnings possible. But most of those people have no background in finance niche and they have a very low or no experience with forex or CFD trading.

And with the tempting offer to enter the place where many millionaires were born, good amount of people will get attracted by a low min. deposit requirements and by a big leverage that should make those huge earnings possible. But Such traders use in most cases big leverage and with the minimum knowledge about the market they wipe out their initial deposit in a blink of an eye. And why wouldn’t brokers welcome such clients? They always appreciate the money they get from them. So please, I urge you to be realistic and keep your expectations in check. Because if you do not do so you might be on your way towards destruction (well, at least the capital you have deposited might be).of those people have no background in finance niche and they have a very low or no experience with forex or CFD trading.

How to learn using the leverage properly


The best way to learn how to handle the leverage is to practise with it, trade with it. With the use of leverage, every pip heading towards your direction can mean significant earnings. For a unexperiencced trader, it will in most cases mean disaster. Practising with real funds is absurd, that is what demo accounts are for. So I encourage you to create one practise account and discover yourself how good you are with the leverage. After few months or better when you are absolutely certain that you can handle the use of leverage to your advantage, you can think about trading on a real account with real funds. The temptation to jump on a real account sooner than you are ready might cost you the hard made money you earned in your job, so think about your decision twice.

A Beginners Guide to Trade and Structured Finance

Monday, August 21st, 2017 | Author: Kredent | Category: Basic Finance


  trade finance

International trade accounts for some £18tn worth of imports and exporting per year. Trade finance is the umbrella term used for international trade transactions, encompassing many areas from currency, payment methods, credit terms and freight.

 

Although trade finance exists as one of the most historic forms of finance, over the recent years, the demand for cash management or capital rationalisation has increased, thereby increasing the need for such finance products. It’s now been recognised by the ICCWBO that there is a global shortage for the provision of trade finance to SMEs.

Some of the parties involved in trade finance are:

  • Arrangers
  • Financiers (banks, alternative funders, institutions)
  • Borrowers (warehousers, transporters, collateral managers)
  • Security agents
  • Guarantors
  • Insurers
  • Buyers

What is Trade Finance?


Trade finance is the financing of goods and services between buyers and sellers. Normally, a seller of goods and services wants guarantee of payment (or even up front payment) when a seller wants to purchase off them.

A bank or financier can take on the risk and guarantee payment which could allow the seller to produce the goods, ship them, and await payment from the end buyer (or end customer), which is the premise of trade and structured finance. During the process, the title of goods (Bills of Lading) is transferred to the financier until the goods are delivered to the buyer.

 

What is needed in the transaction

 

Trade finance allows companies to purchase, receive and sell goods / services before the payment is made. Often many businesses might not have sufficient working capital, credit facilities or credit rating. Trade finance is a financial instrument from a funder which provides security and guarantee to sellers / suppliers before they are shipped to the buyer, and advances payment to the sellers on dispatch.

 

These facilities can also be extended using invoice finance or cash advances which allows payment to be made at the point at which the end customer makes final payment.


What are the risks of trade finance


Risks of trade finance are high, given the inherent nature of trading in different jurisdictions, with different contracts in different markets.When undertaking international trade, it’s important for funders, arrangers, borrowers and sellers to understand the following risks:


  • Sanctions – are there any rules in place which restrict the transport of certain goods (e.g. animal products) in certain countries
  • AML (anti-money laundering) – what is the source of finance and payment method, and what’s the nature of the businesses transacting
  • Financial crime – understanding the obligators, shareholders of companies, and governments involved
  • KYCC / KYG – knowing the customer, and goods
  • Know the parties

INTEREST RATE AND ITS TYPE……..

Friday, August 26th, 2016 | Author: Shravan Kumar | Category: blog


  INTEREST +RATE =INTEREST RATE INTEREST –Extra money paid for using other money is called interest. RATE-A fixed priced paid or charged for something. Interest rate is the amount charge, expressed as a percentage of principal by a lender to a borrower for the use of assets. Interest rates are typically noted on a annual basis known as annual percentage rate. (APR) The assets borrowed could be anything cash, consumer good large assets such as a vehicle or building. Interest is basically a rental or leasing charges to the borrower for the assets use. In case of large assets like vehicle or building the interest is sometimes known as lease rate. When the borrower is a low risk party, they will usually be charged a low interest rate. If the borrower is considered high risk the interest rate that they are charged will high. NEGATIVE INTEREST RATE –Any interest rate that falls below zero is called negative interest rate it refers to case when deposits incur a charge for storage at a bank, than rather receiving interest income. FIXED INTEREST RATE- A fixed interest rate will not change during the period of fixed rate that we choose. FLOATING INTEREST RATE –A floating interest rate will go up or down as interest rates in wider market change. SIMPLE INTEREST RATE- If interest paid on a sum borrowed for certain period is uniformly then it is called simple interest. COMPOUND INTEREST RATE- It is a rate paid on principle as well as on interest for specified period. REAL INTEREST RATE-A real interest rate is a rate that has been adjusted to remove the effects of inflation, to reflect the real cost of funds to the borrower and the real yield to the lender or investor. The real interest rate of an investment is calculated as the amount by which the nominal interest rate is higher than the inflation rate. NOTE-SUPPLY AND DEMAND IN THE MARKET AFFECTS INTEREST RATE.

ANALYSE THE MARKET :- TO RULE THE BOX OFFICE OF THAT BUSINESS

Friday, August 26th, 2016 | Author: vikram khandelwal | Category: blog


                            ANALYSE     THE   MARKET…   TO   RULE   THE   BOXOFFICE   OF   THAT   BUSINESS   Image result for market analysis   Every businessman wants to make more and more profits and become successful. Some really become and some don’t , although they put their all hard-work and skills.  There is basically one difference between the two, i.e  SMART  work and HARD work. The one who gets success focuses more on SMART work than on HARD work. Today’s competitive market world permits only the smart and sparkling thinkers to move ahead . So friends ,till now , you all must be curious to about how to do that SMART work, right ?          So take a deep breath n relax …its really very simple  and easy to understand. Every businessman should do a proper “MARKET ANALYSIS” , no matters whether he/she is just starting a business or reviewing an existing business .One should always remember that  “ MARKET IS SUPREME  & TREND IS FRIEND “ . Now  the very first question that arises in our mind is –   Ø What is market analysis? Ø Why to do a market analysis ? Ø How to do market  analysis?   MARKET  ANALYSIS.  Definition “ A market analysis is the study of the dynamism of the market.”                                                                             By:-Pestle analysis It is the attractiveness of a special market in a specific industry. Market analysis is basically a business plan  that presents information regarding the market in which you are operating in .   WHY   TO   DO   MARKET   ANALYSIS ? A  market  analysis is done so that you can formulate a strategy on how to run your business. Market changes every moment , so a business needs to watch for changes in its market.  You need to understand and judge, what’s actually going on with your market.  What’s the marketing trends and fashion do you see having an influence in our market segments.   CERTAIN   INGREDIENTS   THAT   ENHANCES    THE   FLAVOUR   OF   YOUR   ANALYSIS. The most common ingredients are Strength , Weakness , Opportunities and Threats. By assessing the company’s strengths and weaknesses, you can make a strategy on which factors to focus upon. We also look at external factors like situations which may provide us with an opportunity or threat. Economic factors, political instabilities or even social changes can give you opportunities which you can seize and do better. They can also create  threats which are  going to hamper your business  dealings.     DIMENSIONS   OF  MARKET ANALYSIS  :- Market size Growth rate of the market Market trends Make profitability Distribution  channels Industry cost structure Key success  factors Ø Technology progress Ø Economics of scale Ø Efficient utilization of resources   HOW   TO   DO   MARKET   ANALYSIS   ? It is done mainly by the followings ways:- Technical analysis, Fundamental analysis, Sentiment analysis and Competitor analysis.   Let  us  see , how good TECHNICAL ANALYSIS  is ? It is an analysis of financial market  data  where  price pattern ,movement in volume and other market information are analyzed  by  employing trading rules. In technical analysis, prices trend directionally (i.e. up,down,sideways or some combinations). Technicians employ many methods, tools & techniques as well as charts to analyze data .By using charts, it is easy for us to identify price patterns and market trends in financial markets and attempt to exploit those pattern. Beside charts, there are several kinds of trends and patterns ; some with unusual patterns:- rectangle ,triangle, Bollinger bands, inverted head and shoulder, candle sticks etc   FUNDAMENTAL   ANALYSIS It is an analysis of company’s financial statements (like balance sheet, income statement   etc). Fundamental analysis is a  holistic approach of studying  a  business. It gives us the conviction to invest for long-term wealth creation. It is also known as quantitative analysis. Generally, fundamental analysis is used most often in context of stocks, but we can perform this analysis on any security, from a bond to a derivative. This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of the firm and thus find opportunities where he/she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.   SENTIMENT ANALYSIS It refers to the use of natural language processing, text analysis and statistical analysis to identify and extract subjective information in source material. It is widely applied to reviews and social media for a variety of applications ranging from marketing to customer service.   Approach to sentiment analysis can be grouped into three categories:- Ø Knowledge-based techniques Ø Statistical methods Ø Hybrid approaches   COMPETITIVE   ANALYSIS It is an assessment of the strengths and weaknesses of current and potential competitors. The analysis provides both an offensive and defensive strategic content to identify opportunities and threats. In addition to analyzing current competitors it is necessary to estimate the entrance of new competitors which would be likely when:- ü there are high profit margins in the industry. ü there is future growth potential. ü there is no major barrier to enter.   Thus, it is very important for every business plan to include a proper      and complete market analysis so as to show positive performance and satisfactory results in stock and  other markets.   HAPPY  READING

SUN PHARMA- GROWING CHILD OF M&A

Friday, August 26th, 2016 | Author: Prasant Kamani | Category: blog


  No company in the Indian corporate history has propelled itself so huge by fructifying the tool called M &A (Merger & Acquisition) like Sun Pharmaceutical Industries Limited did. Currently it is the 5th largest generic pharmaceutical company in the world and the No. 1 pharma company of India.          

We all must have heard both success and horror stories of M&A, as it ‘shakes off’ the internal and external eco-system of the company involved.  But the key lies in execution –thereby having realistic mutual expectations from the merger. It ultimately leads to incremental value for shareholders.
 
 ENHANCING VALUE
Value creation is the goal here which Sun Pharma has achieved every time since 2004 it bought Caraco Pharma for Rs. 170Cr, right up to its latest acquisition of Ranbaxy Laboratories for $4 billion in 2014.      

Every company in the world thinks about ways of growing their business, keeping in mind money constraint and pace with competition.

  M&A seems to be an effective tool for bringing significant trans-formative changes.  Sun Pharma’s organic growth has been so unprecedented that it founds itself commanding market cap of nearly Rs. 2 lakh crores.

MAN WITH A MIDAS TOUCH

Dilip Shanghvi, Founder and Managing Director of Sun Pharma despite being conservative has always chosen distressed assets to acquire and has successfully turned around each of them. Such aggressive nature has paid dividends which no Indian pharma company could even conceive of cashing.

 

SWEET FRUITS OF M& A

For Sun Pharma, M&A has served as a positive extension to the company helping it achieve greater efficiency, and stronger competitive strength so that the collective value of the products and services from 16 acquisitions/mergers has taken the company to the next level of excellence.       HAPPY READING !!  :)


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