Question

ITF 302 HOMEWORK GUIDELINES
You are required to conduct an analysis on Turkish Derivatives Market by emphasizing the following points
1- What is VIOP?
2- What is a derivative?
3- What are the underlying assets?
4- Why should I invest on the products at VIOP?
5- What are the hours that VIOP products can be traded?
6- How does margin and collateral work with products traded at VIOP?
7- What does it mean a “risky account”?
8- What is the tax treatment for profits and losses from derivatives transactions on VIOP contracts?
Important Points:
The report must be written in Times New Roman, 12 pt. and 1.5 line space and justified format. The minimum page for the report must be 3 without the references. You are required to add the references at the end of the report.

Answer 1

1. VoIP is the technology that converts your voice into a digital signal, allowing you to make a call directly from a computer, a VoIP phone, or other data-driven devices. ... You may also hear it referred to as IP telephony, internet telephony, broadband telephony, or broadband phone service.

Voice over Internet Protocol

VoIP is short for Voice over Internet Protocol. Voice over Internet Protocol is a category of hardware and software that enables people to use the Internet as the transmission medium for telephone calls by sending voice data in packets using IP rather than by traditional circuit transmissions of the PSTN.

2. A derivative is a contract between two parties which derives its value/price from an underlying asset. The most common types of derivatives are futures, options, forwards and swaps. Description: It is a financial instrument which derives its value/price from the underlying assets.

3. the underlying assets

.Underlying assets give derivatives their value. For example, an option on stock XYZ gives the holder the right to buy or sell XYZ at the strike price up until expiration. An underlying asset can be used to identify the item within the agreement that provides value to the contract.

The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. These assets are commonly purchased through brokerages

4. VIOP is the right choice for investors who want to gain profit in the context of their price expectations because it provides the opportunity to invest to the same amount of underlying assets as spot market but with a lower amount of collateral.

The quality, amount and term of the asset to be traded in VIOP contracts are standardised.

VIOP contracts are traded in an organised market. The margin system through the Derivatives Market in Turkey (VIOP) is under the guarantee of Takasbank. In order to trade, you need to invest the required margins established per contract.

VIOP contracts can be traded until maturity. The settlement method of single stock futures and single stock options contracts on expiry date is physical delivery, and in other futures contracts, the method is cash settlement on expiry date.

5. risky account

Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.

• Business Risk: These types of risks are taken by business enterprises themselves in order to maximize shareholder value and profits. ...
• Non- Business Risk: These types of risks are not under the control of firms.

Risk implies future uncertainty about deviation from expected earnings or expected outcome. ... We have liquidity risk, sovereign risk, insurance risk, business risk, default risk, etc. Various risks originate due to the uncertainty arising out of various factors that influence an investment or a situation