List of Derivatives Articles

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.

Index Options are derivative instrument, which means their value is derived from the movements in the underlying index.

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.

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.

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

Just as you understand futures trading, it is also important to understand the future contract settlement and especially the future contract settlement process.

Even when a broker claims that trading in futures and options is free of cost, it is not free. Even the low-cost brokerage houses make cash trading in delivery free of cost but brokerage on futures is charged.

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.

An option is a right to buy without the obligation to buy or a right to sell without the obligation to sell. The former is the buyer of a call option and the latter is the buyer of a put option.

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.

In financial markets we all understand volatility as something very unstable and very bad.

Futures and options are not just about trading and hedging but also about simple and hybrid strategies Futures and options strategies are at the core of derivatives and there are a variety of F&O trading strategies that one can safely and effectively apply.

During the last week of every month, we tend to hear the words like derivatives settlement and derivatives expiry on all the business and news channels.

If the derivatives contract expire on the last Thursday of the month, then what happens after that? That is what is called the derivatives settlement cycle.

To understand settlement of options you need to break up the buy side and the sell side of the option distinctly.