Lets talk about Derivatives!
What is Derivatives? Derivatives is a financial contract or any product whose value is derived from its underlined asset. It means the value is depends on some else product price. Here, the underlined asset can be any: Financial asset such as shares, bonds, debenture, etc. Agri commodities such wheat, rice, bajra, etc. Metal such as gold, silver, aluminum, etc. Energy resources such as crude oil, electricity, coal natural gas, etc. Products in Derivatives Market: Forward: It is an contract or agreement between the parties to buy and sell an underlined asset at a certain future date for a particular price that is pre-decided on the date of contract. Futures: A futures contract is similar to forward, except that the deal is made through an organized and regulated exchange rather than being negotiated directly between two parties. Options: An Options is contract that gives the right, but not an obligation to buy or sell the underlying on or before a stated date and stated price. While bu
