Chapter 3 Limits and the Derivative Section 4 The Derivative.
Derivative:- An Overview - content.icicidirect.com
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Derivative:- An Overview
Content
Derivative are financial instrument that derive their value from other existing asset classes known as underlying. The term "Derivative" indicates the instrument derives its values entirely from the asset it represents be it :
Derivatives instruments are legal contracts. All specifications are pre defined and binding
the asset represented will increase or decrease in value and within a set period of time.
specu lator who wishes to take more risk.
Arbitrageurs take advantage of discrepancy between prices in two different markets. Arbitrageurs keep market prices stable and reducing possible exploitation of prices.They are typically the most experienced market players who make fast decisions
risks. A speculator will accept a level of risk only if he is convinced that the associated
risks. A speculator will accept a level of risk only if he is convinced that the associated
A customized contract between two parties to full fill terms of the contract on a due date
to sell his harvest
conditions are clearly mentioned in the contract
date of delivery etc
different contracts
The difference between spot price and future price
The cost of funding underlying asset is cost of carry.
maintenance margin
walkout of contract in an unfavourable condition without obligation !!!!!
above strike price the premium goes up. The holder of
or below strike price the premium goes up. The holder of
unlimited gain unlimited loss
unlimited gain unlimited loss
contact you want to trade
and in option Type either call or put