Computational Methods for Finance Lecture 1 Notes:
Equities
- Represents partial ownership in a company
- Investors gain returns through dividends or capital growth
- E.g. Stocks of listed companies like Apple or Tesla
Commodities
- Includes natural resources such as gold, oil and agricultural products
- Highly influenced by supply, demand and seasonal factors
- E.g. Gold futures, crude oil, wheat contracts
Currencies (Forex Market)
- Involves the exchange of one currency for another
- Exchange rates can either float freely or be pegged to other
currencies
- E.g. Trading EUR/USD or GBP/JPY pairs
Indices
- Measures the performance of a group of stocks representing a
market or sector
- Provides benchmarks for overall market trends
- E.g. S&P 500, FTSE 100
Primary Market Secondary Market
The marketplace for new A platform where investors
securities issued directly by buy and sell previously
companies or governments issued securities
Aimed at raising capital for Enhances liquidity and price
new projects or business transparency in the market
expansion E.g. Buying Tesla shares on
Key Activities: Initial Public the stock exchange
Offering (IPOs) and new bond Key Features:
issuance - Continuous trading of stocks,
E.g. A company issuing bonds and derivatives
shares to the public for the - Major exchanges: NYSE,
first time NASDAQ, LSE
Sell Side Buy Side
Provides services to issuers Focuses on investing and
and investors, focusing on managing funds to
transactions and market generate returns
creation E.g. BlackRock managing
E.g. Goldman Sachs ETFs for retail investors
advising a company on an Activities:
IPO - Mutual Funds and ETFs
Equities
- Represents partial ownership in a company
- Investors gain returns through dividends or capital growth
- E.g. Stocks of listed companies like Apple or Tesla
Commodities
- Includes natural resources such as gold, oil and agricultural products
- Highly influenced by supply, demand and seasonal factors
- E.g. Gold futures, crude oil, wheat contracts
Currencies (Forex Market)
- Involves the exchange of one currency for another
- Exchange rates can either float freely or be pegged to other
currencies
- E.g. Trading EUR/USD or GBP/JPY pairs
Indices
- Measures the performance of a group of stocks representing a
market or sector
- Provides benchmarks for overall market trends
- E.g. S&P 500, FTSE 100
Primary Market Secondary Market
The marketplace for new A platform where investors
securities issued directly by buy and sell previously
companies or governments issued securities
Aimed at raising capital for Enhances liquidity and price
new projects or business transparency in the market
expansion E.g. Buying Tesla shares on
Key Activities: Initial Public the stock exchange
Offering (IPOs) and new bond Key Features:
issuance - Continuous trading of stocks,
E.g. A company issuing bonds and derivatives
shares to the public for the - Major exchanges: NYSE,
first time NASDAQ, LSE
Sell Side Buy Side
Provides services to issuers Focuses on investing and
and investors, focusing on managing funds to
transactions and market generate returns
creation E.g. BlackRock managing
E.g. Goldman Sachs ETFs for retail investors
advising a company on an Activities:
IPO - Mutual Funds and ETFs
