All Government Jobs Are you willing to know the detailed information about Derivatives and Futures? Here is the article which provides you the detailed information about the Derivatives and Futures. Future is the most common form of Derivatives. Brief description of these Derivatives and Futures are given below:-
Derivatives:-
Derivatives are the financial instruments which derive their value in the form of "Underlying". This Underlying can be a stock issue by a company, a currency(or) Gold, etc.
Derivative Instrument & Derivative Markets:-
Here that any instrument that derives its value on its underlying equity, index foreign exchange, commodity and many more assets as a type of Derivative Instrument. Later in the 1970s, the financial derivatives came into the spotlight for the growing instability in the financial products markets. However, since their emergence, these products have become very popular and by 1990s, they accounted for about two-thirds of total transactions in derivative products.
Different Types of Derivatives:-
These derivatives can be classified as Futures.
Forward & Future Contract:-
It is a customized contract for two parties to buy (or) sell an asset at a specified future time at price agreed upon today. A future contract is a special type of forwarding contracts in the sense that they are standardized exchange-traded contracts, such as Funbtures of the Nifty Index.
Options:-
It is a contract which gives the right, but not an obligation to buy or sell the underlying at a stated date and stated price. These options are of two types, they are:-
- Calls:- It gives the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price.
- Puts:- It gives the buyer the right but not the obligation to sell for a given quantity of underlying asset is given at a price.
