At Zebu, we are here to guide you with the several product choices you have in the market, and those that best suit your present and future financial needs. Click on any of the financial instruments and trading options in the market, listed below for more information.
An equity is one of the main asset classes in investments. It is a stock / share that gives you ownership of a small part of a company.
- High potential for profit, in the form of capital gains.
- Good source of income and ROI in the form of dividend yields
- Limited liability for equity shareholder
- Enhanced value of holding in the long term with the growth of the company
- Can be converted to cash quickly
- Good hedge against inflation
- No tax on long-term equity gains
Futures is a contract between two parties to buy/sell an asset at a future date, for a price agreed upon. Option is a contract wherein there is a right to buy or sell at a specified price on a set date. The buyer of the option pays a premium to buy the right to exercise the option.This means he is not obligated to buy / sell within / end of the specified period. The seller, who receives the premium, is under an obligation to fulfill the transaction if the buyer exercises the option.
- Profits can be higher in F&Os.
- It is a leveraged product and enables investors to earn higher returns but carries higher risk too.
- Low capital requirement to buy options. The investor has to pay only the margin money, which is usually 5-20% of the contract.
- It is possible to short-sell and hold in case of F&O.
- Brokerage is also typically low.
Currency Derivatives Segment (CDS)
Currency Derivatives Segment (CDS) is a form of F&O contracts wherein it is possible to buy or sell specified quantities of pairs of currencies at a predetermined future date.
- Currency derivatives are efficient risk management instruments.
- It is possible to make profits by taking advantage of the exchange rates of different markets and exchanges.
- For trading in currency derivatives, it is enough if you pay the margin amount instead of the full traded amount.
- Traders in currency derivatives have hedging opportunities too.
- Currency futures make it possible to speculate on the short-term movements in the currency market.
- CDS allows companies to manage the risk of currency fluctuations better by locking the exchange rate.
Raw materials and finished products like coffee, food grains, metals and oil can be bought or sold in the commodity market, usually through futures.
- Commodity investments offer a safe refuge in times of crisis.
- They offer a good protection against inflation.
- They help investors have a diversified investment portfolio.
- The process in commodity futures trading is transparent.
- It is possible to trade on low margins(capital) in the commodity market.
- Investment in commodity futures offers high liquidity.
- Investors and HNIs can invest in physical gold, which can be held in a safe deposit approved by the exchange.
Mutual Fund is a pool of money from many investors who invest in stocks or other investment options. MF schemes are usually managed by professionals and run by asset management companies.
- MFs offer a wide range of investment options – equity, debt and hybrid.
- MFs are one of the cheapest investment options; they are easy to invest in and redeem, and a lot easier than dealing with stocks on your own.
- Even with a small amount, an investor can enjoy the benefits of a large pool of stocks as MFs invest in a diversified portfolio of companies.
- The investment is professionally managed by qualified and highly experienced fund managers.
- MF investments can be made in lumpsum or on a monthly basis through systematic investment planning (SIP).
- Best option to beat inflation.
- Investors also can buy/sell/switch their investments according to their financial goals and risk appetite.
A depository is an organisation that holds securities (shares, debentures, bonds, government securities, mutual fund units, etc) of investors in an electronic form at the request of the investors through a registered depository participant. In India, a depository participant is described as an agent of the depository. They act as the intermediaries between the depository and investors.
- Only pre-verified securities are traded, so the title is clear.
- Problems of bad deliveries are avoided. There is no risk associated with physical certificates like signature mismatch, loss, theft or mutilation.
- Electronic transfer saves a lot of time while preparing shares, certificates and transfer deeds. The settlement time is also less. So, there is no undue delay in the investor getting dividends, rights and bonus.
- There is no stamp duty costs.
- No problem of odd lots, as the marketable lot in depository is fixed as one share.
- Account holder can freeze his / her account for a particular period of time as a safety measure.
- Investors can deliver shares in any part of the country without any transportation risk and cost.
Initial Public Offering (IPO)
IPO is the first time that a company raises capital from the public by selling its stocks in the open market.
- Investors can bid for a large number of shares of a company.
- Investing in IPOs is profitable as you get a fair price.
- Returns from IPOs can be higher than other listed shares in certain cases.
- Opportunity for investors to pick up stock in niche industries.
Portfolio Management Services (PMS)
These are customised services offered to manage or cater to the investment objectives or goals of different investor classes. These are usually offered to a niche clientele—HNIs and institutions.
- Investors can maximise their overall returns.
- By diversifying portfolio holdings, PMS helps minimise risk.
- Optimal allocation of resources.
- PMS holdings are isolated and usually not affected by general investor behaviour.
- With professional research and advice, investors can have a balanced portfolio.
- Investors can adjust their portfolio according to market conditions.