List of Derivatives Articles

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.

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

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.

In the financial markets, leverage is used extensively to increase the potential return on investment. Leverage involves using borrowed capital or securities to fund a financial asset.

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

A bull call spread strategy is an Options trading strategy that uses two Call Options with different strike prices to create a range.

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 Long Combo strategy is a well-known Bullish trading strategy. This options strategy is generally used when there is a degree of certainty about the rise of market prices.

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

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.

What do we understand by squaring off a futures transaction? To understand how to square off futures position, remember that futures position can be either long or short.

In the financial markets, leverage is used extensively to increase the potential return on investment. Leverage involves using borrowed capital or securities to fund a financial asset.

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

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.

When you first begin investing, you realise that there are numerous terms you are required to learn to mitigate losses and ensure you are profitable. Although the wide range of financial instruments available for investing in the Indian market provides a plethora of profit-making opportunities, you can end up making losses if you are not well versed with each of them.