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.

A legal agreement involving the sale and purchase of a certain commodity, asset, or security at a predetermined price at some point in the future is known as a future contract. To facilitate their trade on the futures exchange

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.

Nifty options have emerged as the most liquid trading contract on the NSE. Today, options on the Nifty alone account for more than 80% of the total volumes on the NSE on a daily basis. This volume becomes higher as the expiry for the month approaches. Let us first spend a moment on the idea of a Nifty option.

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.

One of the most important aspects of an options contract is the strike price or the exercise price. This is the price at which the buyer agrees to buy the stock and the seller agrees to sell the stock.

Covered call and covered put are two classic examples of a covered strategy where your derivatives position is actually backed by a cash market underlying position.

We know that an option in financial parlance is the right to buy or sell an asset without the obligation. For this right without the obligation, the buyer of the option pays a price which is called the options price or the option premium.

One of the popular confusions for traders is margin vs futures. Are they one and the same. To understand the margin vs futures debate, remember that margin trading is normally applicable to cash markets while futures trading pertains to the futures or F&O market.

If you have been trading in the commodity markets or the forex markets, you would be quite familiar with the concept of spot rates and forward rates.

Almost every investor in the Indian financial market is different in the way they use investing strategies.