Derivatives

Read the article to understand the difference between how can you better understand the difference between the pricing structure in spot and future pricing

Options trading allows you to buy or sell stocks, ETFs, etc. at a specific price within a specific date. This type of trading also gives buyers the flexibility to not buy the security at the specified price or date. Options trading is a little more complex than stock trading. However, it can help you make relatively larger profits if the price of the security goes up. That’s because you don’t have to pay the full price for the security in an options contract. In the same way, options trading can restrict your losses if the price of the security goes down. Understand what is option trading and how to trade in options. Also, read about options trading related terms, its types etc.

The world of derivatives – is considered one of the most complex financial instruments. In this article, we decode the derivative market for you. Like its counterparts abroad, the derivative market in India is increasingly gaining significance. Since derivatives were introduced in 2000, their popularity has grown manifold.

Put options are commonly used as a hedging tool against potential losses in the underlying asset or as a way to profit from a decrease in the asset's value. The price of a put option is affected by factors such as the price of the underlying asset, the strike price, time until expiration, and market volatility. Read this article to better understand how put options work.

To buy and sell futures contracts, one needs to open a trading account with a broker, deposit margin money, select a futures contract, place an order specifying contract details and quantity, monitor market movements, and exit the contract by offsetting the position before the expiration date or settling it in cash. Read the article to know more.

The unique Max Pain theory explores the dynamics of price changes as options get closer to expiration. It is a curious phenomenon that appears at the point in time when the majority of option traders experience the greatest level of financial hardship. In order to reduce their losses when the options expire, options sellers or market makers may manipulate the price of the underlying asset, according to the idea behind maximum pain.

Starting January 2025, NRIs trading in derivatives do not need a CP code. This will ensure NRIs have a smoother experience trading in the markets and ensures greater market efficiency.

An interest rate future is a futures contract having an underlying asset that provides interest. An agreement between a seller and a buyer for the future delivery of an asset carrying interest is called a contract. The asset's price can be fixed for a later date by the two parties involved in a contract. So, interest rate futures are a unique kind of derivative instrument. Let's learn what interest rate futures are in this detailed guide.