Introduction to Derivatives
Concept of Derivatives
A derivative is a financial instrument, essentially a contract, whose value is derived from the v...
Evolution of Derivatives
Derivatives likely originated in simpler forms, possibly as agreements between merchants or farme...
Participants and Functions of Derivatives Markets
Participants: Hedgers: These individuals or entities use derivatives to reduce their exposure t...
Exchange-Traded and Over-the-Counter Derivatives
Exchange-Traded Derivatives: Centralized Trading: These derivatives are traded on organized exc...
Types of Derivatives
1. Forward Contracts Definition: A forward contract is a private and customizable agreement betwe...
Classification Based on the Underlying Asset
Derivatives can be classified based on the type of underlying asset: Equity Derivatives: Underl...
Myths about Derivatives
Derivatives are always speculative and risky: While derivatives can be used for speculation, th...