List of Derivatives Articles

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 […]

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.

A European option can be exercised only at the expiration date, whereas the American Option can be exercised at any time on or before the expiration date. The right of the option buyer is a lot more powerful in an American option.

Investors choose derivative trading for its high potential of diversification and limiting their exposure to the fall of a specific asset class.

Options trading involves various permutations and combinations of Call and Put options.

The put call ratio actually tries to make sense of the loads of puts and calls of various strikes that get traded and make sense of what these trends are really throwing up.

For traders who rely on technical analysis for devising trading strategies, price movements and past trends aid in decision making.

When talking to an investor, you get to know that they lost all of their capital while trading. Thinking that they too would lose their capital, they pass on their idea of investing, thereby losing on huge wealth multiplication and profits.

OTC options or over the counter options essentially represents options that are privately entered into and are not traded in a standard form in any stock exchange.

Derivatives, especially options contracts, have provided tremendous profits to experienced investors who understand the technicality of the derivative contract.

A Long Call Condor, similar to a long butterfly strategy, is a neutral market-view strategy that offers limited risk and profit.

An Iron Butterfly Strategy or Iron Fly Strategy is an options trading strategy that combines multiple call and put options to devise a market neutral strategy.

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.

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.

The cost of carry model is based on the premise that the futures price of an asset is the spot price plus the cost of carrying. This cost of carrying is an absolute number but the cost of carrying model presents it in percentage terms.