More About Derivatives

If you are familiar with the stock market derivatives by the term, then confrontation will happen. But who has not heard the word derivatives, the derivatives exchange or derivatives businesses go about what to do. So let's start by means of derivatives.

The first thing that the derivative is an instrument, but there is no independent value. Indeed, the underlying asset is based on its value. The underlying asset can be anything, for example - the security or securities index (index) or the stock.

It can also be a commodity or bullion or currency. Derivatives transaction is a term which is determined in advance. It can be any kind of deal - Forward, Options, Futures, hybrid, etc.. After a certain period, the deal is related to the actual value of its underlying asset.



There are many kinds of derivatives transaction. Futures is one of them. Futures contracts have a certain standard. They are trading in structured derivatives exchanges.

But the futures price of the same commodity or stock can be different. Futures price of a commodity or stock price reflects its future date.

Derivative market is the market in which the purchase of derivatives - are marketed. Analysts believe that the derivative of the purchase - sale and purchase in the spot market - sales is twice as risky. Will discuss in detail the reasons and types of derivatives in the next issue