Chapter 2
Treasury Bills : A Treasury Bill (T-Bill) is a short-term debt with a maturity of one year or less.
Repurchase Agreements : A repurchase agreement is a type of agreement between a borrower and a
lender to sell and repurchase a security.
Other Short-Term Instruments : Very low risk, offers slightly different returns depending on the type
Capital Market Securities : It includes instruments that have a maturity of more than one year and do
not have a specific maturity.
Fixed Income Securities : It undertakes to pay certain amounts at certain times depending on a certain
payment schedule of fixed income securities.
Treasury Notes and Bonds: . Treasury Notes debt instruments with maturities of 1 to 10 years, debt
instruments with a maturity beyond 10 years are known as Treasury bonds. They are called treasury notes.
Federal Agency Securities: It authorizes lending to help certain sectors of the economy.
Municipal Bonds : A bond issued by state or local governments or entities they have created, such as
authorities and special districts
Corporate Bonds : A bond issued by a company to raise financing or expand the business for a variety of
reasons, such as continuing operations, mergers and acquisitions.
Preferred Stock : A superior right granted to the share in rights such as dividend, liquidation share, priority
and voting right, or a new shareholding right not stipulated in the law.
Asset-Backed Securities : An asset-backed security is usually a contractual claim on loans. These include
home mortgages, commercial mortgages, auto loans, student loans and credit card debt.
Common Stock (Equity) : is a kind of corporate capital ownership, a kind of security
Derivative Instruments : A financial security that has a value based on or derived from an underlying
asset or group of assets.
Indirect Investing : Stocks, stocks, bonds, other securities or securities means a form of investment
through the purchase of mutual funds and through intermediary financial institutions and in which the
investor does not directly participate in the management of the investment activity.
STOCK MARKET INDEXES : The index was created to measure the performance of the prices and
returns of stocks traded on the stock exchange on a holistic and sectoral basis. Stock market indices are
used to determine the general trends of the stock market based on the price movements in the stocks.
BOND MARKET INDEXES :
A bond index or bond market index is a method of measuring the investment performance and characteristics of
the bond market. There were many different structured indices designed to measure the total bond market and its
various sectors.
Chapter 3
TRADING MECHANICS
A trading mechanism defines the "rules of the game" that market participants must follow: it determines what
actions they can take, their knowledge of other market participants' actions, and the protocol for reconciling buy
and sell orders.
Market Orders : Is an order to buy or sell a stock at the market’s current best available price.
A limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid or the
minimum price to be received.
A stop order is an order to buy or sell a stock at the market price once the stock has traded at or through a
specified price.
MARGIN
As with future plans in the forward goods and money market, today is the future for the payment to be made in
the delivery-to-delivery contracts.
Margin Long Purchase : Margin Market value of assets Amount borrowed/Market value of assets
Margin Requirements for Short Sales:
Margin for short sales is calculated as a percentage of the market value of the short. For
short sales,
Value of the assets- Market value of securities sold short/ Market value of securities sold short
Stock Markets : It is a collection of buyers and sellers who represent ownership claims on businesses and
exchange stocks. These may include securities listed on a public exchange.
Bond Markets
It is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt
securities, known as the secondary market.
Primary Markets
It is the market where the first sales are made. The initial issuance of an investment instrument, such as a stock,
is a primary market transaction.
Types of Trades
Investors are generally thought to have two reasons to trade. The first reason investors trade securities is because
traders believe the price is wrong and buy and sell based on perceived mispricing.
Trading Costs
In economics and related disciplines, transaction cost, or transaction costs, is the cost of an economic
transaction.
ÖMER TAŞAN
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