Derivatives: Introduction To Derivatives In Capital Market
Derivatives : Introduction To Derivatives In Capital Market
WHAT IS DERIVATIVES?
The term ‘Derivatives’ stands for a contract whose price is derived from or is dependent upon an underlying asset. The underlying asset could be a financial asset such as currency, stock and market index, an interest bearing security or a physical commodity.
WHAT IS PREMIUM?
Premium is always Payed or Receive.
Premium paid by buyer and received by seller.
Premium is transferred from one party to another party it is known as premium exchange or premium shift.
Derivatives comprise two basic contracts namely Future or Options .
A futures contract is an agreement between two parties to buy or sell an asset at a certain time in future at a certain price.
These are basically exchange traded, standardized contracts and the Contract is 100% safe with ID and order number it is like a legal contract.
Can we earn money through Derivative Trading?
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