Derivatives

 

Derivatives

Derivatives as the term itself says its been derived from some other thing.  A derivative is an instrument whose value is derived from the value of one or more underlying assets , it can be stocks ,commodities, metals, currencies, bonds, stocks indices, etc. Here is the most common examples of derivative instruments Forwards, Futures, Options and Swap . Participants in a derivative market can be classified into four sets based on their trading motives :

 

  • Hedgers
  • Speculator
  • Margin trader
  • Arbitrager

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