Author Archives: Mahak vats

Highly motivated, Optimistic, Enthusiastic, Having certification in Investment Banking, possess the skills of Foreign Exchange, Stock Market, Derivative Markets with Remarkable analytical skills, problem solving abilities and good professional communication skills. Looking forward to start career in investment banking to enhance career growth in corporate world.

Dirty price and Clean price

DIRTY PRICE-A dirty price includes accrued interest along with a bond’s coupon payment.

If a bond quotes between coupon payment dates, the price cited includes accrued interest upto the day of quote. Dirty quotes are standard in europe.

For eg- Let’s say Samsung issued a bond with 1000 face value while $960 is the published price. The bond pays coupon rate of 4% annually and the payments are semi-annual. As a result, investors would receive $20 every six months for holding the bond.

If someone wants to buy the bond then he would receive the quote from the broker which will include 960$+accrued interest till the date of quote.

CLEAN PRICE-The clean price is the price of a coupon bond which donot include accrued interest payments.

The clean price is typically the quoted price on financial new sites. Clean quote are typical in US.

For Eg-Let’s take same example Samsung issued a bond with 1000 face value while $960 is the published price. The bond pays coupon rate of 4% annually and the payments are semi-annual. As a result, investors would receive $20 every six months for holding the bond.

If someone wants to purchase it then on the date of purchase,if it is trading at $1005, then the purchaser will buy it at $1005 only, No accrued interest will be included.

Bullish Market, Bearish Market and Range Bound Market

BULLISH, BEARISH AND RANGE BOUND MARKET

In investing world, “bull and “bear” is used a lot to refer to market conditions, mainly it depicts stock markets performance whether, the market is appreciating or depreciating.

A bull market is a market that is on the rise and where the conditions of economy are favorable whereas a bear market is the one that is in decline.

A range bound is the one in which prices bounces between a specific high price and a low price.

In bullish market, there is a strong demand and weak supply for securities, whereas in bearish market, more people are looking to sell then buy soo the demand is lower than supply hence share prices drop.

Investors are willing to participate in the hope of obtaining a profit but in bear market, market sentiments are negative so investors begin to move towards fixed income securities instead of equities

Also the scope of international investment gets widens up in bullish market but in bearish market international investments migtht get postponed as it is not a favorable option to carry on.

Range-bound trading methodologies include associating response highs and lows with flat trendlines to distinguish regions of help and opposition.