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 Short Straddle is a complex Options strategy that consists of selling both a Call option and a Put option, with the same strike price and expiration date.

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.

Any trading in the capital markets is risky and there is no getting away from it. The best you can do is to smartly and prudently manage this risk.

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

A Long Call Condor, similar to a long butterfly strategy, is a neutral market-view strategy that offers limited risk and profit.

In the stock markets, pricing of any asset class is based on expectations. For example, the future price is the expected spot price and the spot price is nothing by the present value of the expected spot price.

The stock markets permit you to buy and sell in equities, futures, options, etc. In all these trades, you take a view on the movement of the security in question and take a position. However, there is also another way of doing this, i.e. betting on the spread.

If you trade in the futures and options space in India, You would have regularly come across the term stating that a particular stock is in the F&O ban period.

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

The Indian financial market is termed the ‘Market for Everyone’, as it includes financial instruments that can cater to the financial needs of every type of investor.