Aspect
Broker
Dealer
Role
Acts as an intermediary between buyers
and sellers, matches buyers and sellers of Buys and sells securities on its own behalf,
securities
provides liquidity to the market
Primary
function
Executes trades on behalf of clients,
Facilitates trading in securities by buying and
provides investment advice, research, and selling them for its own account, maintains an
other services
inventory of securities
Clientele
Retail and institutional investors
Retail investors, institutional investors, other
dealers, and brokers
Income
source
Commissions on trades, fees for services
Profits from buying and selling securities, bidask spread
Risk
exposure
Market, credit, and operational risk
Market and credit risk
Examples
Charles Schwab, E-Trade
Goldman Sachs, JPMorgan Chase
Aspect
Regulatory
Body
Bank
NBFI
Regulated by
Regulated by Bangladesh Securities and
Bangladesh Bank Exchange Commission, Insurance
Development and Regulatory Authority,
Aspect
Bank
NBFI
Microcredit Regulatory Authority or other
authorities depending on the type of NBFIs
Primary
Function
Accepts deposits
and provides
loans and other
banking services
Provides various financial services such as
leasing, factoring, underwriting, insurance,
mutual fund management, venture capital, and
other investment services
Clientele
Retail and
Corporate clients, individuals, and institutional
corporate clients investors
Source of
Funds
Deposits from
customers,
borrowings from
other banks or
central banks
Issue bonds, debentures, or other debt
instruments, capital contributions from
shareholders, and loans from other banks or
financial institutions
Focus on credit
risk, interest rate
Risk
risk, and liquidity Focus on market risk, credit risk, and
Management risk
operational risk
Aspect
Bank
NBFI
Ownership
Usually owned
by private
shareholders or
the government Owned by private entities
Deposit
Insurance
Deposit
insurance
provided by
government
through
Bangladesh
Deposit
Insurance
Corporation
Deposit insurance may or may not be provided
depending on the type of NBFI
Examples
Agrani Bank,
Islami Bank
Bangladesh
IDLC Finance, LankaBangla Finance
The margin rule refers to regulations set by financial regulatory bodies, such as the
Securities and Exchange Commission (SEC) in the United States, which govern the
amount of money investors must have in their margin account when buying securities
on margin. Margin refers to the practice of borrowing money from a broker to purchase
securities.
The margin rule sets the minimum amount of equity that investors must have in their
margin account, expressed as a percentage of the total value of the securities being
purchased. For example, if the margin requirement is 50%, an investor who wishes to
purchase $10,000 worth of securities on margin would need to have at least $5,000 of
their own money in their margin account.
The margin rule also sets limits on the amount of margin debt investors can take on
relative to the equity in their margin account. This is known as the "maintenance
margin," which is the minimum amount of equity an investor must maintain in their
margin account at all times. If the value of the securities in the margin account falls
below this threshold, the investor may be required to deposit more funds or sell
securities to bring their margin account back up to the maintenance margin level.
Overall, the margin rule is designed to help ensure the stability of the financial system
by preventing excessive speculation and limiting the amount of risk investors can take
on when buying securities on margin.
Technical Analysis
Fundamental Analysis
Focuses on past market data, such as price
and volume, to identify patterns and trends.
Focuses on analyzing a company's financial and economic data to
determine its intrinsic value.
Uses charts, graphs, and technical indicators
to identify entry and exit points for trades.
Analyzes a company's financial statements, management, industry
trends, and economic indicators to determine its long-term
prospects.
Assumes that all market information is
reflected in the price and volume data.
Assumes that market prices can deviate from a company's intrinsic
value due to temporary market conditions or investor sentiment.
Technical Analysis
Fundamental Analysis
Primarily used by short-term traders to make Primarily used by long-term investors to identify undervalued or
quick profits from market movements.
overvalued stocks for long-term investment.
Does not require knowledge of a company's
operations or industry.
Requires an understanding of a company's operations, industry, and
competition.
Can be applied to any market, including
stocks, commodities, and currencies.
Primarily used for analyzing stocks and other securities, although it
can also be applied to other assets.
It's important to note that these are generalizations, and there can be overlap
between technical and fundamental analysis in some cases. Additionally, both
approaches can be used together as part of a comprehensive investment
strategy.