• Derivatives Basics

    A derivative is a security or instrument whose value is derived from the value of the underlying security.

    Derivatives are mainly used to hedge any position on any asset or reduce the uncertainty caused by sudden prices changes. Some derivatives are standardized by the Stock Exchanges and they can only be traded through Different exchanges only.

    There are different types of Derivatives. They are mainly:

    1. Forward
    2. Futures
    3. Options
    4. Swaps

    All these types of Derivatives are described in their respective sections.

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