Derivative:- An Overview

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Derivative are financial instrument that derive their value from other existing asset classes known as
underlying. The term "Derivative" indicates the instrument derives its values entirely from the asset it
represents be it :
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Derivatives instruments are legal contracts. All specifications are pre defined and binding
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the asset represented will increase or decrease in value and within a set period of time.
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specu lator who wishes to take more risk.
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Arbitrageurs take advantage of discrepancy between prices in two different markets.
$UELWUDJHXUV Arbitrageurs keep market prices stable and reducing possible exploitation of prices.
They are typically the most experienced market players who make fast decisions
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risks. A speculator will accept a level of risk only if he is convinced that the associated
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A customized contract between two parties to full fill terms of the contract
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on a due date

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to sell his harvest
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conditions are clearly mentioned in the contract

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walkout of contract in an unfavourable condition without obligation !!!!!
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above strike price the premium goes up. The holder of
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or below strike price the premium goes up. The holder of
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and in option Type either call or put

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