CFA L1 / Equity / M1. Market Structure
Module 1 · Equity

Market Organization and Structure

EN: Asset classes, market participants, order types, and margin trading.
VN: Lớp tài sản, các bên tham gia, loại lệnh, giao dịch ký quỹ.

1. Asset Classes Concept

About: Securities (equity, FI, derivatives), currencies, commodities, real assets, contracts. Classification matters for asset allocation, risk, and regulation.Tóm tắt: Securities, currencies, commodities, real assets, contracts. Phân loại quan trọng cho allocation.
  • Securities Equities, fixed income, derivatives, pooled vehicles.
  • Currencies FX spot and forwards.
  • Commodities Energy, metals, agricultural — usually traded as futures.
  • Real assets Real estate, infrastructure.
  • Contracts Forwards, futures, options, swaps.

2. Order Types Concept

About: Market (immediate at best price), limit (price-protected), stop (triggered at level), stop-limit (combined). Each balances execution probability vs price control.Tóm tắt: Market (ngay), limit (giá), stop (kích hoạt), stop-limit. Cân bằng execution và giá.

By execution

  • Market Execute immediately at best available price.
  • Limit Buy ≤ limit price, sell ≥ limit price.
  • Stop Triggered when price crosses stop level.
  • Stop-limit Stop trigger + limit constraint.

3. Margin Trading — Leverage Ratio Core

About: Leverage = 1 / IM%. With 50% IM you have 2× leverage. Amplifies both gains and losses; margin calls trigger if equity falls below maintenance.Tóm tắt: Leverage = 1/IM%. IM 50% → 2×. Khuếch đại lời/lỗ; margin call khi equity < maintenance.
\[ \text{Leverage} = \frac{1}{\text{Initial margin}\,\%} \]
Practice problem

Initial margin is 50%, stock returns 20%. Investor's return on equity?

Show solution
Leverage = 1/0.50 = 2×
Return on equity ≈ 2 × 20% (ignoring borrowing cost)
≈ 40%

4. Margin Call Trigger Price Core

About: Triggered when equity / position value falls to maintenance margin %. Investor must add cash or position is liquidated. Calculate trigger price to set stop-losses.Tóm tắt: Kích hoạt khi equity / position xuống mức MM. Phải nộp thêm tiền hoặc bị thanh lý.
\[ P_{\text{call}} = P_0 \cdot \frac{1 - \text{IM}}{1 - \text{MM}} \]

Components

  • IM Initial margin %.
  • MM Maintenance margin %.
Practice problem

Initial margin 50%, maintenance 30%, purchase price $40. At what price is margin call triggered?

Show solution
\(P_{call} = 40 \cdot (1-0.5)/(1-0.3) = 40 \cdot 0.50/0.70\)
≈ $28.57