List of Derivatives Articles

The credit spread Options strategy is a simple yet popular trading strategy. It involves buying and selling Call or Put Options with the same underlying asset and expiration date.

A ratio spread is a neutral options trading strategy in which an options trader holds an unequal number of long (purchased) and short (written) options contracts.

Derivatives are financial instruments that are aimed at managing risks inherent in any financial investment. The returns that derivatives allow investors to earn are based on the performance of the underlying assets that can be stocks, commodities, currencies 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.

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.

Rollover may sound like a complex and high flying esoteric word but in reality it is quite simple. You must have heard the word rollover quite often concerning futures. Traders often refer to rollover in the stock market as long rollover or short rollover.

Is it really possible to have strategies in futures? After all, futures are plain vanilla products just like the cash market? The truth is that there are futures strategies that are possible in the market.

Stock market indicators are essentially quantitative tools applied by traders and investors to interpret financial data. The broad intent is to forecast stock market movements and make profits out of the same.

Iron butterfly strategy aims to create a market-neutral strategy by combing call and put options with identical expiration dates which consolidate at a middle strike price.

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.

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

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

The universal truth of the financial market is volatility. Investors who are inexperienced fear volatility as they think it can lower the value of their investments.

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.

Swaptions (Swap + options) is a derivative financial instrument with a swap as the underlying. One party called the writer or seller of the option gives another party called the holder or buyer of the option the right to exchange interest rates.