Derivatives Trading
Derivatives trading involves buying and selling contracts like futures, options, swaps, and forwards. These contracts derive their value from underlying assets such as stocks, commodities, currencies, or interest rates. The buyer of a derivative can either take delivery of the asset at contract maturity or offset it by entering into an opposite contract. Derivatives can be traded on exchanges or over-the-counter (OTC) markets. These instruments allow traders to hedge risk, speculate on price movements, or gain exposure to various assets without directly owning them.
Related Terms
Index Futures
Index futures are derivative contracts tied to an underlying index, such as Nifty Bank, Finnifty,...
Listing Date
The listing date is the day a company's shares become available for trading on a...
Discounted Cash Flow
Discounted Cash Flow (DCF) is a method used to value a company or investment by...
Interest Rate Futures
Interest rate futures are derivative contracts based on interest-bearing instruments, such as bonds or loans....
Margin Funding
Margin funding, offered by brokers, lets traders borrow funds to enhance their purchasing power in...
Authorized Capital
Authorized capital, or authorized share capital, represents the maximum value of shares a company can...
