Basic Concept of Derivatives Analysis and Strategy

Basic Concepts of Derivatives

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Basic of Derivative Concepts

Derivative Analysis

Basic Concepts of Derivatives

Derivative Indicators

Basic Options Strategy

Advanced Option Strategy

Derivative Analysis FAQ’s

Derivative Analysis Glossary

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A derivative is a financial contract whose value is determined by the price of an underlying asset, a group of assets, or a benchmark. A derivative is a contract that can be traded over-the-counter or on an exchange between two or more parties (OTC).

Concept of Risk Management

Risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions.

Introduction to Derivatives

A Derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset Derivatives can be used to either mitigate risk

Origin of Derivatives

A group of Chicago businessmen formed the Chicago Board of Trade (CBOT) in 1848.The primary intention of the CBOT was to provide a centralized location

Types of Derivative Products

There are four types of Derivative Products. These are forwards ,futures,options and swaps

Index Derivatives

Index futures are futures contracts whereby investors can buy or sell a financial index today to be settled at a date in the future.

Participants in Derivative Markets

There are a wide variety of products available and strategies that can be constructed which allow you to pass on

Benefits of Derivatives

Derivates are frequently used to determine the worth of the underlying asset. For example, the spot prices of the futures can function an approximation of a commodity price.

Basics of Forwards Market

Forward markets function over the counter and set prices for financial instruments or assets to be delivered in the future.

Future Contracts

A futures contract is an agreement made through an organized exchange to buy or sell a fixed amount of a commodity or a financial asset on a future date at an agreed price.

Futures v/s Forwards

Futures contract and Forwards contract are the type of derivative contract, but there is slightly difference between them.

Applications of Futures

Some applications of Futures contract.

Option Terminology

Options emerged as a financial instrument, which restricted the losses with a provision of unlimited profits on buy or sell of underlying asset.

Future Pricing

Futures contract pricing is determined by the characteristics of the underlying asset.

Futures v/s Options

Futures and options are similar trading instruments that allow investors to make money while also hedging their present investments.

Weekly Options & it's interpretations

Weekly's expirations are shorter than regular options.

Binary Options

A binary option is a financial product where the buyer receives a payout or loses their investment, based on if the option expires in the money.

Application of options

Some applications of option contract.

Option pricing

Option pricing is the calculation of the fair value of an option, which traders use in their trading tactics.

Hedging strategy using options

Investors use hedging methods to decrease their risk exposure in the event that a portfolio asset experiences a sudden price decline.

Top ten mistakes by option traders

Some of the common mistakes by option traders.