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NOT NULL CONSTRAINT -    Ensures that a column cannot have a null value. DEFAULT CONSTRAINT -    Provides a default value for a column when none is specified  UNIQUE CONSTRAINT -   Ensures that all values in columns are different  CHECK CONSTRAINT -   Makes sure that all values in a column satisfy certain criteria  PRIMARY KEY CONSTRAINT -   Used to uniquely identify a row in the table  FOREIGN KEY CONSTRAINT -   Used to ensure referential integrity of the data  Primary Key - is used uniquely to identify each row in a table . It can consist of one or more columns on a table . When Multiple columns are used on a table it is called composite key.  Foreign Key - Foreign key is a column or columns that references a column most often primary key of another table . The purpose of foreign key is to maintain referential integrity of the data. Pg admin  Data base - training - right click on training - query click  Always add semi colen to run the query  Int - integer  varchar - variable charact
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Forward and Futures Market

Forward market 

Example -  Importer in India and bought goods from USA , i have to pay in dollars , say 1$=70, So On 1st April i have to pay , the inflation fluctuation will be there , if it goes down it will be my benefit . I bought i good it will be rs.700000 but if its appreciating it will not good for us so i will hedge by coming into forward market. 

So Bank will give me different rate there will be  a contract between bank and the importer binding on both parties at future date . This will be OTC Offline Over The Counter . Now whatever the rate will be you don’t have to worry , this is forward market to reduce the loss. 

Definition - Forward is a contract where one party(importer )commits to buy and the other party to sell a specified quantity of an agreed upon asset for a pre determined price at a specific date in the future . 

It is customised contract , Terms that a contract are agreed upon individual parties. Hence it is traded OTC.

Futures 

Definition -are standardised contract where lot size is fixed by Organised Exchange . 

Standardisation can be on quantity , quality , delivery dates , procedure , price quotes 

You can take 2 positions ie long (buy) and short (sell).

Types of Futures Contracts -

1. future - Dealing with shares 

2. Commodity futures


Terminologies associated with Futures -

Transaction date - the day at which the contract held

Settlement date - expiry date Ready contract - Jan contract is ready contract 

Basis - Future price will be more as the cost will be more . Difference between Spot price of asset and future price is basis

Cost of carry - Reason why there is basis , difference .It is nothing but interest rate.

 **Spot Price + cost of carry = futures

Long FC - Buy 

Short FC- Sell


Cost to Carry model of future pricing 

Cost to carry means costs associated with the carrying value of an investment . These costs can include financial costs , such as the interest cost on bonds, interest expenses on margin accounts , interest on loans used to make an investment , and any storage costs involved in holding a physical asset. 

Cost of carry may include opportunity costs associated with taking one position over another . In the derivative market , cost of carry is an important factor for consideration when generating values associated with an asset's future price.

We have to consider below while generating the value associated with futures.

Infosys 1418 was spot price + IC + IE . Interest Cost , Interest Expense .

Example - if 10gm Gold in spot market 30000

Locker rent - 300 

Insurance -150 

Interest Rate - 10% 

Compute FMV of 3 months future .

Answer ---> Future price would be more than 30000. Locker rent is storage rate. Interest Rate will be on total cost.

30000+300+150=30450+761.25 (30450*10%*3/12)=31211.25





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