Financial Instruments

[PCM]

The FTSE MIB is a stock market index of Borsa Italiana, the Italian national stock exchange. Its previous name (prior to June 2009) was S&P/MIB 40. S&P/MIB replaced, from September 2004, the MIB-30 index.
The index consists of the 40 most-traded stock classes on the exchange. The index was administered by Standard & Poors from its inception until June 2009, when this responsibility was passed to FTSE Group, which is 50% owned by the Borsa Italiana's parent company London Stock Exchange Group..
The components of the index are:

A2A (A2A) Ansaldo STS (STS) Assicurazioni Generali (G) Atlantia (ATL) Autogrill (AGL) Azimut Holding (AZM) Banca Monte dei Paschi di Siena (BMPS) Banca Popolare dell'Emilia Romagna (BPE) Banca Popolare di Milano (PMI) Banco Popolare (BP) Buzzi Unicem (BZU) Campari Group (CPR) DiaSorin (DIA) Enel (ENEL) Enel Green Power (EGPW) Eni (ENI) Exor (EXO) Fiat (F) Fiat Industrial (FI) Finmeccanica (FNC)

Impregilo (IPG) Intesa Sanpaolo (ISP) Lottomatica (LTO) Luxottica (LUX) Mediaset (MS) Mediobanca (MB) Mediolanum (MED) Parmalat (PLT) Pirelli (PC) Prysmian (PRY) Saipem (SPM) Salvatore Ferragamo (SFER) Snam Rete Gas (SRG) STMicroelectronics (STM) Telecom Italia (TIT) Tenaris (TEN) Terna (TRN) Tod's (TOD) UBI Banca (UBI) UniCredit (UCG)

[PCM]

Bonds are debt securities that are issued as a mean to raise finance.
This kind of arrangement involves two counterparties:

• The issuer: which is the debtor, physical person or legal entity, that borrows the money
• The holder: which is the creditor, physical person or legal entity, that lends the money

Hence the issuer is committed by the bond contract; to payback the holder a prescribed interest rate (coupon) at fixed intervals (monthly, semi-annually, annually etc.) in addition to the loaned funds (bond principal) at a predetermined date (maturity date).

Bonds are issued by companies, credit institutions and governmental authorities. In the case of governmental authorities, bonds are issued to finance current expenditure.

A discount bond pays the holder only at the maturity date, whereas a coupon bond pays the holder a fixed amount (coupon) over a specified interval (month, year, etc.) plus paying a fixed amount at the maturity date. A consol bond is a bond without maturity.

[Yousuf Ali]

Zombie Currency

A zombie currency is a legal currency that is no longer used as the main currency of trade. Zombie currencies are created in severe inflation or even hyperinflation scenarios and while it has not yet been replaced or revalued, people loose confidence in their domestic currency and start top adopt currencies of other nations as the basis of trade.

It's a slang term made popular when the Zimbabwe dollar was suffering hyperinflation. Although the currency was still being printed in millions and the billions, alternate currencies such as the U.S. dollar, the South African rand, the euro and so on, were used by anyone.

[Yousuf Ali]

Yield

In general, yield is a term that defines a return on a capital investment of various forms. Typically, yield is expressed as a percentage and is used as an annual figure.

This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.

In the stock market the yield essentially refers to the interest or dividends received from a security, also called a dividend yield, based on the investment's cost, its current market value or its face value.

Yield is also a function of the bond market. One of its applications is the coupon (the bond interest rate fixed at issuance). Another one is the current yield, which is the rate of interest divided by the purchase price. Additionally, the rate of return on a bond takes into account the total of annual interest payments, the purchase price, the redemption value, and the amount of time remaining until maturity, called maturity yield.

[Yousuf Ali]

Yield curve

The yield curve is a graphic representation of market yield for a fixed income security plotted against the maturity of the security.

Under normal circumstances, the yield curve is positive, that means, long-term rates are higher than short-term rates. This reflects investor's expectations for a higher premium when taking on more risk by holding the bond for longer.

[Yousuf Ali]

Yield Spread

The difference between yields or rates on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument. The spread can be measured between debt instruments of differing maturities, credit ratings and risk.

There are several contexts in which the term yield spread is used and its significance is relative to the norm for that pair of yields: in comparing bonds, for example, it usually refers to issues of different credit quality.

A yield spread can also shrink to zero then begin to expand in the opposite direction, as happens in the case of an inverted yield curve.

[Yousuf Ali]

Xenocurrency

Xenocurrency is a currency traded or circulated in a country, other than its native country.

The term has been also suggested to include deposits and loans denominated in currencies other than that of the country where the bank is resident.

The greatest part of xenocurrencies consists of US dollars although its relative proportion has been decreasing in favor of other currencies.

[sichone]

I want to thank you brothers about the information about trading stocks, indices and so on. I have looked for this information for some months. I got the information by internet searching but they are separated each other and the are not comprehensive. This information makes me understand them comprehensive and I think I can be a success trader if I have good knowledge about them

[Danielpeters]

Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity (share), or a contractual right to receive or deliver cash (bond).