List of Derivatives Articles

Any trading in the capital markets is risky and there is no getting away from it. The best you can do is to smartly and prudently manage this risk.

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

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.

Max Pain is the financial situation that is defined by the strike price of most live options contracts.

If you are an investor looking for short-term financial instruments, Options is a great option. It is a derivative contract that gives the owner the right to buy or sell securities at an agreed-upon price within a certain period.

In the Indian market, the equity and commodity markets used words like Badla and Undha Badla. These are more popularly known as Contango and Backwardation in market parlance.

One of the most common term you get to year in the derivatives market is the term “Underlying Asset”.

A derivative is a financial instrument that derives its value from an underlying asset. The underlying asset can be equity, currency, commodities, or interest rate.

A swap is an agreement that allows users to exchange the cash flows or liabilities from two different financial instruments.

We know that an option in financial parlance is the right to buy or sell an asset without the obligation. For this right without the obligation, the buyer of the option pays a price which is called the options price or the option premium.

If you have been trading in the commodity markets or the forex markets, you would be quite familiar with the concept of spot rates and forward rates.

Almost every investor in the Indian financial market is different in the way they use investing strategies.

Covered call and covered put are two classic examples of a covered strategy where your derivatives position is actually backed by a cash market underlying position.

One of the popular confusions for traders is margin vs futures. Are they one and the same. To understand the margin vs futures debate, remember that margin trading is normally applicable to cash markets while futures trading pertains to the futures or F&O market.

One of the most important aspects of an options contract is the strike price or the exercise price. This is the price at which the buyer agrees to buy the stock and the seller agrees to sell the stock.