A

SHORT PRESENTATION
ON
 To know the basic meaning of Futures &
Derivatives
 To understand the role of Futures &
Derivatives in the business economy
 To be able to differentiate between
Futures & Derivatives
 To become familiar with futures &
derivatives’ terminologies
 To utilise the knowledge in relevant field
Terminology Meaning

Futures contracts for assets (especially commodities or shares) bought

at agreed prices but delivered and paid for later.

Options buy or sell an option on.

Commodities a useful or valuable thing.

Derivatives an arrangement or whose value derives from and is dependent

on the value of an underlying asset, such as a commodity,
currency, or security.

Hedging the planting or trimming of hedges.

speculation investment in stocks, property, etc. in the hope of gain but

with the risk of loss.
 WHAT IS
DERIVATI
VES ???
MEANING OF DERIVATIVES ?
• A general name for all financial instruments whose price
depends on the movement of another price.

Advantages:
To Buyer
• Provides Protection against unstable price rate.

To Seller
• Secure the sales of product in the market

Overall
• Increases selling and investment in the long-run.
TYPES OF DERIVATIVES

1. Futures
2. Forwards
3. Options
4. Swaps
1. FUTURES
Standardized Contract between
Organization.
Specific rate for a specific period of
time.

Regulated Strictly.

This term is used for business

purpose.
FORWARDS
Forwards Contracts are also called
forward commitments.
Purchase or sell of a good later at price
agreed today.

Private contract between two parties.

Similar to the Futures.

Customized for each trade situation.

OPTIONS

Contract that gives rights but not obligation.

No requirement of strictly sticking to a single buyer/seller.

Contract giving the holder their right to take a certain

action(mostly traded on an exchange)

Minimizes the risk factor to a new extent. 

CONCLUSION:

• Derivatives is a general name for all financial instruments

whose price depends on the movement of underlying
entity.
• It is used to minimize the risk in the business market.
• Above all, the derivatives is a most important tool in the
business environment.
ANY
QUERIES ?