A Beginner’s Guide to Asset Management Allocation in Trade Life Cycle!

October 14, 2019
Asset Management Courses

What is trade?

Trade is an exchange of items within or outside the country. Trade has two elements: Buying and Selling. The catalyst which makes this buying-selling process hassle-free is money. In earlier times, people used to exchange the goods they have for the commodities which were owned by other people but today, you cannot separate money from the trade.

Trade, as we know, is a process. And as every financial process involves a lot of assets, trade also makes use of the same. People who are trained with proper asset management courses can do this asset allocation with a lot of ease.

Asset Management Courses

Stages in the Trade Life Cycle

In a globalized economy, trade is a continuous process. Exchanges take place now and then. Mentioned below are the prominent steps involved in the trade life cycle. With capital market training, you can understand each step involved with much more ease.

  • Sales

The process of Sales starts when there is a demand for a good or service. It starts with the seller and ends with the buyer. By this process, a client is acquired and then is provided by multiple buying options

E.G.: Various investment avenues that are available with an Investment banker. Such investment tools are curated according to the needs of the investor and then presented to him in the form of Hedge funds or mutual funds to the client.

  • Trade Initiation and Execution

Once the investor or the buyer selects the product or service he likes and places the order with the seller, the process of trade begins. Trade begins when there is a monetary exchange and even if the buyer asks the seller to give various quotes for his product (As in the case of huge deals). As soon as the order is placed by the buyer and it gets accepted by the seller, the trade is said to be executed.

  • Trade Capture

The real challenge starts once the order has been placed. It percolates down to several channels that use various assets to get the job down. Assets such as a bank, commodity, etc. have to be allocation right and quick to deliver the trade experience smoothly. This process can be made efficient by proper Asset Management courses. Trades are then recorded in the whole operating system and arealso brought into the Risk management system which will help in reducing risks associated with a particular deal and maximize value.

  • Trade Validation and Enrichment

The trade is then validated by several teams and various sets of parameters. Various stable and dynamic parameters are considered and are validated before the actual trade takes place. Assets such as currency have to be allocated and depreciation sand appreciation parameters have to be brought into the picture.

  • Trade Confirmation

This step is one of the most important steps of the Trade Life cycle. Various confirmations are made by both the parties in terms of delivery and payment of the products or services involved in a trade settlement. All of this is done at least a day before the settlement takes place. This provides a window to both the parties to make necessary changes to the trade deal.

  • Trade Settlement

This is the step where the commodity or the service gets delivered to the buyer. The buyer gets the required in exchange for cash. Also, buyers get security in exchange for cash. If the case is of derivatives, a particular currency is also delivered in return for some other currency.

  • Reconciliation

This step involves the bookkeeping and recording of transactions to meet the necessary accounting details of both the buyer and the seller. This also involves vouching, matching ledger accounts, etc. With effective training in the capital market training and various asset management courses, this process can be made much easier and convenient to implement.

To know more about A Trade Life Cycle – The Process of Buying & Selling, feel free to visit on below blog:

Trade Life Cycle – The Process of Buying & Selling

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