Unlearnt lessons from Barings
The management of Barings broke a cardinal rule of any trading operation - they effectively let Nick Leeson settle his own trades by putting him in charge of both the dealing desk and the back office. This is tantamount to allowing the person to take blind positions with no outside controls

Will Euro dominate the US$ ?
The EU will remain one of the largest exporting zones in the world. This will boost the euro as an international invoicing currency and means of payment. However, the preference of the EU's main trading partners will shift to the euro when exchange rate variations are expected to be limited

Rupee's Next Destination
Sustaining the nominal exchange rate above the value expected by the market requires high interest rates to prevent capital from flowing out of the country. Over time this harms domestic investment, output and productivity and creates a vicious cycle of rising costs

Life after IMDs
The SBI issue of India Millennium Deposits has been a grand success. Now the billion dollar question, is what is the government going to do with the funds to justify the high cost of funding. Obviously, infrastructure funding and rupee propping are the options. But one is miniscule and the other unproductive

SBI encore of Resurgent Bonds
State Bank of India is in the foreign currency deposit market again, but the question is what to do with the proceeds. Infrastructure projects are hard to come by and anyway the long gestation will lead to a maturity mismatch for SBI. Is the IMD actually a wise decision

Clearing snags for Derivatives Takeoff
Its been fairly long since derivative trading started off on Indian bourses. But activity has failed to really take off with low transacted volumes. The absence of clear guidelines on tax-related issues and the high cost of transaction are the key factors impeding the derivative market..........more

Why is the rupee falling
The rupee created history recently when it breached the 46 mark, which brings us to the question, why is the rupee falling. In a nutshell it is being driven more by the imbalances in demand and supply. But on the positive side it has made the Indian economy more attractive ..........more

How to whisk your oil price risk
The recent decision to permit oil companies to hedge their oil price risk is significant in two ways. Firstly, it will improve the profitability of oil companies by limiting their downside exposure. Secondly, it will reduce volatility in forex markets by avoiding forex outflow bunching .......more

Demystifying Derivatives
Despite the introduction of index futures on the BSE and the NSE, derivatives continue to mystify the general public, who still view derivatives as a dangerous Frankenstein created by Wall Street's rocket scientists. Understand the basic myths and realities pertaining to derivatives ..........more

Why is the rupee falling ?
The secular fall in the rupee over the past few weeks has concerned most forex watchers. Why has the government intervention into forex markets failed? Is the rupee fall caused due to import pressures or fund pressures? More importantly, at what level is the rupee going to settle...........more

RBI Walks the Tightrope
With the Indian rupee breaching the psychological barrier of Rs.45/$, the RBI's role in forex markets in the recent past increasingly comes into focus. Is the RBI's hands policy after a spurt of intervention advisable? What does the current scenario hold for the future of the rupee.......more

Arbitrage - Safety with Smartness
The introduction of index futures ushers in the possibility of riskless arbitrage between stocks and futures. An investor can perfectly hedge his position as also the investor can profit from pricing anomalies by going long or short on index futures. How can an investor actually benefit...........more

Options Trading
Ever been stuck with illiquid stocks and wondered about a possible exit route. Options can provide the way out. How can an investor use options trading to liquidate his illiquid stocks. More importantly, how can investor overcome liquidity risk using options...........more

Index Futures at Work
The introduction of index futures on the BSE and the NSE provides a world of an opportunity to investors in India to effectively hedge their market risks. But how does an investor benefit from these futures and what is the process by which these futures hedge your investment risk..........more

Why Derivatives?
The recent decision of BSE and NSE to commence derivatives trading opens up a world of opportunities for the Indian investors. What are the benefits and pitfalls of derivatives trading in India and how can an investor benefit and hedge his risks by using derivative instruments..........more

Down goes the Rupee
The recent downslide in the rupee raises interesting questions for Indian exporters, importers as well as for foreign investments. Was the depreciation of the rupee to a level of 44.74 to a dollar justified? Will the rupee actually settle at around the 45 level as anticipated? More importantly is rupee depreciation so bad after all to worry about........more