List of Derivatives Articles

It is important to understand the difference between forward and future contracts, especially for traders who are involved in the buying and selling of assets.

For financial planners, options could be a great tool to tide over turbulence in markets when things are uncertain, Vatsal Ramaiya says

Futures and Options represent Derivatives of the stock market. These Derivatives are the financial instruments deriving their values from an underlying such as currency, gold, or the stocks of a company.

The difference between underlying securities current spot price and strike price represents the profit/loss that the trader makes upon sale or exercise of the option.

If you have opened the Nifty screen on the NSE website, you will find the link to an Option Chain at the top. Of course, this option chain is also available on your trading terminal, but the NSE Nifty option chain is available to everybody on a real-time basis on the website of NSE. Exactly what is Nifty option chain? It is the complete picture […]

Options strategies are basically combinations. We shall look at various types of options strategies along the way and also now to apply such option trading strategies along the way.

What do we understand by the term “Hedge”. The word hedge means protection or covering your risk.

If you are in the capital market, then volatility is part and parcen of the game. Of course, by volatility we mean that the markets fluctuate and add to your risk.

Options are not only liquid but they are many times larger than the cash market and the futures market in terms of daily volumes.

An index is a benchmark like the Nifty or the Sensex. Typically, indices can be generic benchmarks like Nifty and Sensex. Alternatively, indices can also be thematic benchmarks like the Bank Nifty, Nifty IT etc.

The essential difference between call option and put option arises from the fact that one is an option to buy an underlying asset and the other an option to sell the asset.

A futures contract is a right and obligation to buy or sell a contract at a future date at a price that is determined and agreed upon today.

A future contract is a right and an obligation to buy or to sell an asset. Remember when we talk of types of futures contracts, there are futures across asset classes.

A futures is a contract to buy or sell an underlying asset at a future price, called the exercise price, at a future date, called the expiry date.

Currency options are a low upfront cost method of participating in the currency derivatives market. Like currency futures, currency options are also available on pairs like the USDINR, EURINR, GBPINR etc.