17.1 Financial derivatives

17.1 Financial derivatives

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A derivative is an instrument whose value is derived from the value of one or more basic variables called...
17.3 Forward contracts

17.3 Forward contracts

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Before discussing this concept lets discuss about spot market. In a spot market, what you generally do?

17.4 Futures

17.4 Futures

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A future contract, unlike the privately-traded forward contract, is publicly traded. 

17.5 Futures payoff

17.5 Futures payoff

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If on the expiry date, the actual price of Reliance Industries is Rs 1300, Mahesh can buy the shares at...
17.6 Key concepts

17.6 Key concepts

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A futures spread is simply the simultaneous trading of one contract against another.

17.7 Stock index futures

17.7 Stock index futures

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Stock index futures have become the most popular financial derivative instruments and widely traded all...
17.8 Options

17.8 Options

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Options, are another type of derivative instruments. Some people might say options are bit complex...

17.10 Key concepts

17.10 Key concepts

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The writer of the Call Option is generally bearish, while the writer of the Put Option is...

17.11 Pay-offs of options

17.11 Pay-offs of options

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The optionality characteristic of options results in a non-linear payoff for options. 

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