A security may display two prices at the same time. One shows what a buyer is ready to pay, while the other shows what a seller expects to receive. The gap between these prices is called the Bid-Ask spread. It may look small, but it affects trading cost, liquidity and the price at which a […]

When Meera cleared out her father’s cupboard last year, she found a folder of share certificates from the 1980s. Two of them spelled his name differently. Back then, fixing that had taken him months of affidavits and trips to a registrar’s office in another city. Meera bought her first corporate bond in June. It appeared […]

A hedge is meant to reduce uncertainty, but it may not remove every part of the risk. Sometimes, the asset being protected and the instrument used for protection do not move in exactly the same way. The remaining mismatch is known as Basis Risk. It is commonly seen in commodity futures, bond hedging, banking and […]

Financial institutions receive money from one side and deploy it on the other. A bank may accept short-term deposits but offer long-term loans. An insurer may collect premiums today and settle claims years later. Asset and Liability Management helps such institutions plan these cash flows, manage risk and remain prepared when market conditions change. Key […]

Prices shown in financial markets do not always refer to the same point in time. One may apply to a transaction happening now, while another may relate to a future date. The Spot Price is the current cash-market value of an asset. It helps investors understand what a share, commodity, currency or bond is worth […]

Interest rates do more than decide how much a deposit or bond may earn. They can also influence the value of one currency against another. Interest Rate Parity explains this connection. It compares interest rates in two countries with their spot and forward exchange rates and shows why a higher foreign interest rate may not […]

A security may show several prices at the same time. One buyer may be willing to pay ₹100, while a seller may expect ₹102. The buyer’s offer is known as the Bid Price. Understanding this figure helps an investor read market quotes, estimate a possible selling value and judge how easily a bond or stock […]

Companies need money for many reasons. They may want to expand their business, repay older loans or meet day-to-day funding needs. One way to raise this money is through a Public issue of NCDs. It allows a company to borrow directly from investors while offering interest for a fixed period. Key Takeaways What Is a […]

Most bonds pay the same coupon throughout their tenure. A step-down bond takes a different route. It starts with a relatively higher coupon, which reduces at fixed stages. The change is decided when the bond is issued, so the investor can see the payment schedule in advance. This structure may look attractive initially, but the […]