List of Derivatives Articles

Futures and Options represent Derivatives of the stock market. These Derivatives are the financial instruments deriving their values from an underlying such as currency, gold, or the stocks of a company.

To have expertise in investing and making profits, you need to be well-versed with all trading terminologies. Among various investment instruments that can allow you to earn hefty returns, Over-the-Counter or OTC derivatives are one of them.

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.

Whether you trade in stocks, commodities or any other financial instrument, it can take place across a number of different platforms and in a number of different ways. However, some commonly employed trading methods have

Max Pain is the financial situation that is defined by the strike price of most live options contracts.

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

Contango is a common usage in the futures market, especially when it comes to futures on commodities. Here we try to understand contango meaning and contango definition.

Almost all investors start their investing journey through the stock market. The idea is simple, you buy the shares at a low price and sell them when the prices are high, thereby making a profit.

Most of us who invest in stocks of a company know what is an IPO (initial public offering). An IPO is the first sale of a stock or share by a company to the public.

A swap is an agreement that allows users to exchange the cash flows or liabilities from two different financial instruments.

To understand settlement of options you need to break up the buy side and the sell side of the option distinctly. When a person buys a call or put option, the maximum loss is the premium paid. Hence the settlement of options on buy side begins with premium settlement and then you are done till the position is closed or expires. However, options settlement for sell side is more complex.

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.

A derivative is a financial instrument that derives its value from an underlying asset. The underlying asset can be equity, currency, commodities, or interest rate.

A bear call spread is a two-legged options trading technique that involves selling a call option with a lower strike price to collect an upfront premium and simultaneously buy a new call option with a higher strike price.

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.