Derivatives
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The document discusses various financial instruments in India including the capital market, money market, stock exchanges, commodity exchanges, derivatives such as futures, forwards and options. It provides details on the key features and differences between these instruments such as forwards being a private agreement while futures are exchange-traded and standardized. It also discusses concepts like margin requirements, order types and players in the financial markets like hedgers, speculators and arbitrageurs.
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Options contract on indian derivative market
This PPT is helpful for the student who is doing MBA in finance extreme.
it is just small help from my side in future also i will be uploading these type of PPT'S.
Thank You
Ritesh Sethi
Option contract
This document provides an introduction to option contracts, including definitions, key features, advantages and disadvantages, and types of options. It discusses call and put options, as well as European and American options. Key terminology for options like long, short, strike price, in-the-money, out-of-the-money, and at-the-money are also explained. The document is intended to provide a basic understanding of stock options and how they can be used.
Options
The document provides an introduction to corporate finance options, including:
- A brief history of options and their use in ancient Greece.
- Current options markets and regulators.
- Key terminology related to options contracts.
- The main types of options - calls and puts.
- Common valuation methods and strategies for options positions, including bullish, bearish, and neutral strategies.
Futures and options
Futures contracts obligate the buyer and seller to exchange an asset at a predetermined price on a future date. Options provide the buyer the right, but not obligation, to buy or sell the underlying asset at a predetermined strike price by a predetermined expiration date. The buyer pays a premium for this right. There are call and put options, where calls provide the right to buy and puts provide the right to sell. Options have limited downside risk for the buyer compared to futures contracts, but also have time decay as they approach expiration.
Option ( Derivatives)
An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price on or before the expiration date. There are call and put options. A call option allows buying the asset, while a put option allows selling the asset. The buyer pays a premium to the seller for this right. The profit/loss of the buyer and seller depends on whether the option expires in or out of the money. The buyer's potential profit is unlimited but their loss is limited to the premium paid, whereas for the seller the potential loss is unlimited but profit is limited to the premium received.
Index option
An index option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell a basket of stocks, such as the S&P 500, at an agreed-upon price before a certain date. Index options are similar to other options contracts except the underlying instruments are indexes rather than individual stocks. Options contracts, including index options, allow investors to profit from an expected market move or reduce risk.
Derivatives- CALL AND PUT OPTIONS
This document provides an introduction to options, including the different types (calls and puts), how they work, key terminology, and factors that influence pricing. An option gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before expiration. The buyer pays a premium to the seller for this right. Key terms discussed include strike price, expiration date, and long/short positions. Factors like time to expiration, volatility, and interest rates impact an option's price. The Black-Scholes model is commonly used to price options based on these variables.
Derivatives: Options and it's Greeks
Options are a type of derivative security. They are a derivative because the price of an option is intrinsically linked to the price of something else. Specifically, options are contracts that grant the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. The right to buy is called a call option and the right to sell is a put option. People somewhat familiar with derivatives may not see an obvious difference between this definition and what a future or forward contract does. The answer is that futures or forwards confer both the right and obligation to buy or sell at some point in the future. For example, somebody short a futures contract for cattle is obliged to deliver physical cows to a buyer unless they close out their positions before expiration. An options contract does not carry the same obligation, which is precisely why it is called an “option.”
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Options contract on indian derivative market
This PPT is helpful for the student who is doing MBA in finance extreme.
it is just small help from my side in future also i will be uploading these type of PPT'S.
Thank You
Ritesh Sethi
Option contract
This document provides an introduction to option contracts, including definitions, key features, advantages and disadvantages, and types of options. It discusses call and put options, as well as European and American options. Key terminology for options like long, short, strike price, in-the-money, out-of-the-money, and at-the-money are also explained. The document is intended to provide a basic understanding of stock options and how they can be used.
Options
The document provides an introduction to corporate finance options, including:
- A brief history of options and their use in ancient Greece.
- Current options markets and regulators.
- Key terminology related to options contracts.
- The main types of options - calls and puts.
- Common valuation methods and strategies for options positions, including bullish, bearish, and neutral strategies.
Futures and options
Futures contracts obligate the buyer and seller to exchange an asset at a predetermined price on a future date. Options provide the buyer the right, but not obligation, to buy or sell the underlying asset at a predetermined strike price by a predetermined expiration date. The buyer pays a premium for this right. There are call and put options, where calls provide the right to buy and puts provide the right to sell. Options have limited downside risk for the buyer compared to futures contracts, but also have time decay as they approach expiration.
Option ( Derivatives)
An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price on or before the expiration date. There are call and put options. A call option allows buying the asset, while a put option allows selling the asset. The buyer pays a premium to the seller for this right. The profit/loss of the buyer and seller depends on whether the option expires in or out of the money. The buyer's potential profit is unlimited but their loss is limited to the premium paid, whereas for the seller the potential loss is unlimited but profit is limited to the premium received.
Index option
An index option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell a basket of stocks, such as the S&P 500, at an agreed-upon price before a certain date. Index options are similar to other options contracts except the underlying instruments are indexes rather than individual stocks. Options contracts, including index options, allow investors to profit from an expected market move or reduce risk.
Derivatives- CALL AND PUT OPTIONS
This document provides an introduction to options, including the different types (calls and puts), how they work, key terminology, and factors that influence pricing. An option gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before expiration. The buyer pays a premium to the seller for this right. Key terms discussed include strike price, expiration date, and long/short positions. Factors like time to expiration, volatility, and interest rates impact an option's price. The Black-Scholes model is commonly used to price options based on these variables.
Derivatives: Options and it's Greeks
Options are a type of derivative security. They are a derivative because the price of an option is intrinsically linked to the price of something else. Specifically, options are contracts that grant the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. The right to buy is called a call option and the right to sell is a put option. People somewhat familiar with derivatives may not see an obvious difference between this definition and what a future or forward contract does. The answer is that futures or forwards confer both the right and obligation to buy or sell at some point in the future. For example, somebody short a futures contract for cattle is obliged to deliver physical cows to a buyer unless they close out their positions before expiration. An options contract does not carry the same obligation, which is precisely why it is called an “option.”
Derivatives
Derivatives derive their value from underlying assets. There are various types including forwards, futures, options, and swaps. Forward contracts are bilateral agreements to buy or sell an asset in the future at predetermined terms. Futures are standardized forward contracts that are traded on an exchange. Options provide the right but not obligation to buy or sell an asset by a specified date. Swaps involve exchanging cash flows of underlying assets like interest rates or currencies. Derivatives allow participants to hedge or speculate on price movements of the underlying assets.
Basics of options
This document provides an overview of options basics, including: types of options (calls and puts), components (strike price, premium, intrinsic/time value), risk factors, and strategies (long/short calls and puts). It also defines key Greeks like delta, gamma, vega, and theta that measure an option's sensitivity to changes in the underlying asset price, volatility, and time to expiration.
Unit 2 structure of option market
The document discusses options contracts, including the key parties (buyer and seller), types of options (calls and puts), how option value is determined, and examples of calculating profit and loss for option buyers and sellers. It also defines important option terms and describes the main types of options - stock options, index options, currency options, and futures options.
Fundamentals of Option Contracts
1) Buying call options allows investors to speculate on a rise in the price of the underlying stock or manage risk. The buyer pays a premium for the right to purchase the stock at a set strike price.
2) Strategy #1 involves buying calls to speculate, paying $1,000 in premiums for calls with a $55 strike price hoping to sell them at a profit if the stock rises above $55 before expiration.
3) Strategy #2 involves buying calls to manage risk, protecting a fund manager's planned stock purchase from increases above the $55 strike price before receiving funds in December.
Unit iii
This document defines options terminology and provides explanations of key concepts related to options contracts, including:
- An option contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.
- Key parties are the option buyer/holder and option writer/seller. The writer receives a premium from the buyer in exchange for undertaking the obligation.
- Important terms include the exercise/strike price, premium, expiration/exercise dates, and classifications of options as in, out, or at-the-money.
- The value of an option has two components - intrinsic value and time value - which are influenced by factors like the underlying
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This document defines various derivatives instruments and concepts. It begins by explaining that derivatives derive their value from an underlying asset and include futures, forwards, and options. It then discusses the different types of traders in derivatives markets including hedgers, speculators, and arbitrageurs. The document also compares over-the-counter (OTC) derivatives to exchange-traded derivatives and outlines some of the economic benefits of using derivatives. It provides examples and definitions for specific derivative types like forwards, futures, and options.
options and their valuation
This document provides an overview of options and their valuation. It defines key terms like calls, puts, exercise price, underlying asset, and premium. It describes the differences between European and American options and possibilities at expiration like in-the-money, out-of-the-money, and at-the-money. The document outlines the payoffs of call and put options at expiration. It also discusses options trading in India, index options, and combinations of options and shares. Finally, it introduces models for option valuation, including the binomial tree approach and the Black-Scholes model.
VBA & ADO MS Access – Part 2
The document provides an introduction to derivatives markets. It defines derivatives as financial instruments whose value is derived from an underlying asset. It describes different types of derivatives including futures, forwards, options, and swaps. It explains how these derivatives can be used for hedging, speculation, and arbitrage. It also discusses major derivatives exchanges and over-the-counter markets.
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Derivatives can be used effectively for risk management purposes such as hedging currency, commodity price, interest rate, and credit risks. Key points:
1) Derivatives like forwards, futures, options and swaps allow companies to hedge existing exposures to financial risks.
2) The right risk management techniques need to be used, as derivatives can reduce risks but improper use may increase risks.
3) Different derivative products are suited to different risk exposures. For example, currency risks are best hedged with forwards or options, while interest rate risks can be managed using interest rate swaps.A study of derivatives ppt
The document discusses various derivatives strategies. It defines a derivative as a security whose price is derived from underlying assets such as stocks, bonds, commodities, currencies, interest rates, and market indexes. The main types of derivatives discussed are forwards, futures, options, and swaps. Forwards and futures are contracts to buy or sell an asset at a future date. Options provide the right but not obligation to buy or sell an asset. Swaps involve exchanging cash flows over time, such as interest rate or currency swaps. The document also analyzes the P/E ratio, P/B ratio, and dividend yield of Nifty 50 companies over different time periods to predict market trends.
Derivatives ppt @ mab finance
This document summarizes key concepts related to derivatives and risk management. It discusses forwards, futures, swaps, and options contracts. It explains how forwards, futures, and swaps work to transfer risk, while options provide choice. The cost-of-carry model for pricing forwards is described. Forward rate agreements are introduced as interest rate derivatives. Forward exchange rates are projected using interest rate parity.
Derivatives
Derivatives are financial instruments whose value is derived from an underlying asset. The three main types of traders in derivatives markets are hedgers who use derivatives to reduce risk, speculators who trade for profits, and arbitrageurs who exploit price discrepancies across markets. Derivatives can be traded over-the-counter (OTC) through privately negotiated contracts or on exchanges through standardized contracts. Common types of derivatives include forwards, futures, options, and swaps. Forwards and futures are binding agreements to buy or sell an asset in the future at an agreed upon price, while options provide the right but not obligation to buy or sell. Swaps involve exchanging cash flows of one asset for another.
Derivatives Basics
Futures and options are the most common types of derivatives used in financial markets. Futures involve a contract where the buyer and seller agree to a deal at a future date at a pre-decided price, obligating both parties. Options give the buyer the right, but not the obligation, to buy or sell the underlying asset at a future date at a pre-decided price, in exchange for paying a premium to the seller who is obligated. Derivatives allow investors to profit from rising or falling prices, and options allow investors to limit their losses to the premium amount.
Investment Banking
This document provides an introduction to financial derivatives. It defines derivatives as financial instruments whose price is dependent on an underlying asset. Common underlying assets include stocks, bonds, commodities, currencies, and interest rates. Derivatives allow parties to mitigate risks related to price movements of these assets. The document discusses various types of derivatives including forwards, futures, options, and swaps. It also covers key concepts like hedging strategies, margin requirements, and historic derivative-related failures like Barings Bank and Metallgesellschaft.
Futures and swaps
Futures and swaps allow parties to manage risks associated with price fluctuations in underlying assets. A futures contract is a standardized agreement to buy or sell an asset at a predetermined price at a specified future date. Key elements of futures contracts include the underlying asset, settlement/delivery date, and futures price. Futures are traded on organized exchanges and involve clearinghouses that guarantee contracts. Futures can be used for hedging, speculation, or arbitrage. Swaps allow parties to exchange cash flows of one party's financial instrument for those of the other party.
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Derivatives
Derivatives are financial instruments whose value is based on an underlying asset such as a stock, bond, commodity, or currency. There are three main types of derivatives: futures and forwards, which are contracts to buy or sell an asset on a future date; options, which give the owner the right but not obligation to buy or sell an asset; and swaps, which involve exchanging cash flows of one party's financial instrument for those of another party. Derivatives offer benefits like speculation, hedging risk, leverage, and flexibility, but also carry risks such as credit risk, potential for crimes, and impacting the leverage of an economy's debt.
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The document provides information on the futures trade process and differences between open outcry and electronic trading. In open outcry trading, brokers take orders in trading pits and execute trades through verbal communication or hand signals. In electronic trading, customers send orders directly to an electronic marketplace and trades are executed by traders accepting bids and offers on computer screens. Electronic trading allows greater price insight and faster trade execution and information dissemination.
Derivatives in India
Derivatives emerged to help farmers and traders manage risks and have since become important risk management tools. The derivatives market in India has grown significantly since liberalization in the 1990s. Derivatives allow participants to hedge risks, speculate, and engage in arbitrage. Common derivatives contracts include forwards, futures, options, and swaps. Traders use various strategies like spreads and straddles to limit risks and maximize returns based on their market outlook. While still growing, India's derivatives market is becoming a major global exchange.
Option Strategies
This document provides an overview of options strategies. It defines derivatives and describes how they derive value from underlying assets. Common types of derivatives are discussed including futures and options. Basic option positions like calls and puts are explained. Popular options strategies like bull call spreads, bear put spreads, and butterfly spreads are defined and examples are provided to illustrate how the payoffs work. Long straddles and short straddles are also introduced as strategies used when volatility is expected to increase or decrease. Key option terms are defined throughout like premium, strike price, expiration date, and different option types.
Fin.Al Mkt
The document provides an overview of financial markets in India including capital markets, money markets, equity markets, and debt markets. It discusses the primary and secondary markets. It describes various financial instruments traded in these markets such as shares, debentures, bonds, mutual funds etc. It also discusses public issues of securities and various types of public issues such as initial public offerings, rights issues, bonus issues etc.
Chapter 02 the derivatives market in india
The document discusses the derivatives market in India. It describes how derivatives were originally traded over-the-counter but exchanges were later created to provide transparency, reduce counterparty risk, and increase regulation. It then outlines the major derivatives exchanges in India and the types of derivatives contracts available, including those for commodities, equities, interest rates, and currencies. Finally, it explains the key components of how derivatives are traded on exchanges, including the order matching process, clearing, margins, and daily and final settlement.
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Derivatives
Derivatives derive their value from underlying assets. There are various types including forwards, futures, options, and swaps. Forward contracts are bilateral agreements to buy or sell an asset in the future at predetermined terms. Futures are standardized forward contracts that are traded on an exchange. Options provide the right but not obligation to buy or sell an asset by a specified date. Swaps involve exchanging cash flows of underlying assets like interest rates or currencies. Derivatives allow participants to hedge or speculate on price movements of the underlying assets.
Basics of options
This document provides an overview of options basics, including: types of options (calls and puts), components (strike price, premium, intrinsic/time value), risk factors, and strategies (long/short calls and puts). It also defines key Greeks like delta, gamma, vega, and theta that measure an option's sensitivity to changes in the underlying asset price, volatility, and time to expiration.
Unit 2 structure of option market
The document discusses options contracts, including the key parties (buyer and seller), types of options (calls and puts), how option value is determined, and examples of calculating profit and loss for option buyers and sellers. It also defines important option terms and describes the main types of options - stock options, index options, currency options, and futures options.
Fundamentals of Option Contracts
1) Buying call options allows investors to speculate on a rise in the price of the underlying stock or manage risk. The buyer pays a premium for the right to purchase the stock at a set strike price.
2) Strategy #1 involves buying calls to speculate, paying $1,000 in premiums for calls with a $55 strike price hoping to sell them at a profit if the stock rises above $55 before expiration.
3) Strategy #2 involves buying calls to manage risk, protecting a fund manager's planned stock purchase from increases above the $55 strike price before receiving funds in December.
Unit iii
This document defines options terminology and provides explanations of key concepts related to options contracts, including:
- An option contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.
- Key parties are the option buyer/holder and option writer/seller. The writer receives a premium from the buyer in exchange for undertaking the obligation.
- Important terms include the exercise/strike price, premium, expiration/exercise dates, and classifications of options as in, out, or at-the-money.
- The value of an option has two components - intrinsic value and time value - which are influenced by factors like the underlying
Derivatives
This document defines various derivatives instruments and concepts. It begins by explaining that derivatives derive their value from an underlying asset and include futures, forwards, and options. It then discusses the different types of traders in derivatives markets including hedgers, speculators, and arbitrageurs. The document also compares over-the-counter (OTC) derivatives to exchange-traded derivatives and outlines some of the economic benefits of using derivatives. It provides examples and definitions for specific derivative types like forwards, futures, and options.
options and their valuation
This document provides an overview of options and their valuation. It defines key terms like calls, puts, exercise price, underlying asset, and premium. It describes the differences between European and American options and possibilities at expiration like in-the-money, out-of-the-money, and at-the-money. The document outlines the payoffs of call and put options at expiration. It also discusses options trading in India, index options, and combinations of options and shares. Finally, it introduces models for option valuation, including the binomial tree approach and the Black-Scholes model.
VBA & ADO MS Access – Part 2
The document provides an introduction to derivatives markets. It defines derivatives as financial instruments whose value is derived from an underlying asset. It describes different types of derivatives including futures, forwards, options, and swaps. It explains how these derivatives can be used for hedging, speculation, and arbitrage. It also discusses major derivatives exchanges and over-the-counter markets.
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Derivatives can be used effectively for risk management purposes such as hedging currency, commodity price, interest rate, and credit risks. Key points:
1) Derivatives like forwards, futures, options and swaps allow companies to hedge existing exposures to financial risks.
2) The right risk management techniques need to be used, as derivatives can reduce risks but improper use may increase risks.
3) Different derivative products are suited to different risk exposures. For example, currency risks are best hedged with forwards or options, while interest rate risks can be managed using interest rate swaps.A study of derivatives ppt
The document discusses various derivatives strategies. It defines a derivative as a security whose price is derived from underlying assets such as stocks, bonds, commodities, currencies, interest rates, and market indexes. The main types of derivatives discussed are forwards, futures, options, and swaps. Forwards and futures are contracts to buy or sell an asset at a future date. Options provide the right but not obligation to buy or sell an asset. Swaps involve exchanging cash flows over time, such as interest rate or currency swaps. The document also analyzes the P/E ratio, P/B ratio, and dividend yield of Nifty 50 companies over different time periods to predict market trends.
Derivatives ppt @ mab finance
This document summarizes key concepts related to derivatives and risk management. It discusses forwards, futures, swaps, and options contracts. It explains how forwards, futures, and swaps work to transfer risk, while options provide choice. The cost-of-carry model for pricing forwards is described. Forward rate agreements are introduced as interest rate derivatives. Forward exchange rates are projected using interest rate parity.
Derivatives
Derivatives are financial instruments whose value is derived from an underlying asset. The three main types of traders in derivatives markets are hedgers who use derivatives to reduce risk, speculators who trade for profits, and arbitrageurs who exploit price discrepancies across markets. Derivatives can be traded over-the-counter (OTC) through privately negotiated contracts or on exchanges through standardized contracts. Common types of derivatives include forwards, futures, options, and swaps. Forwards and futures are binding agreements to buy or sell an asset in the future at an agreed upon price, while options provide the right but not obligation to buy or sell. Swaps involve exchanging cash flows of one asset for another.
Derivatives Basics
Futures and options are the most common types of derivatives used in financial markets. Futures involve a contract where the buyer and seller agree to a deal at a future date at a pre-decided price, obligating both parties. Options give the buyer the right, but not the obligation, to buy or sell the underlying asset at a future date at a pre-decided price, in exchange for paying a premium to the seller who is obligated. Derivatives allow investors to profit from rising or falling prices, and options allow investors to limit their losses to the premium amount.
Investment Banking
This document provides an introduction to financial derivatives. It defines derivatives as financial instruments whose price is dependent on an underlying asset. Common underlying assets include stocks, bonds, commodities, currencies, and interest rates. Derivatives allow parties to mitigate risks related to price movements of these assets. The document discusses various types of derivatives including forwards, futures, options, and swaps. It also covers key concepts like hedging strategies, margin requirements, and historic derivative-related failures like Barings Bank and Metallgesellschaft.
Futures and swaps
Futures and swaps allow parties to manage risks associated with price fluctuations in underlying assets. A futures contract is a standardized agreement to buy or sell an asset at a predetermined price at a specified future date. Key elements of futures contracts include the underlying asset, settlement/delivery date, and futures price. Futures are traded on organized exchanges and involve clearinghouses that guarantee contracts. Futures can be used for hedging, speculation, or arbitrage. Swaps allow parties to exchange cash flows of one party's financial instrument for those of the other party.
Equity options strategies
The objective of this project is to provide the reader with knowledge of the various equity option strategies used today that are applicable in different market situations.
Derivatives
Derivatives are financial instruments whose value is based on an underlying asset such as a stock, bond, commodity, or currency. There are three main types of derivatives: futures and forwards, which are contracts to buy or sell an asset on a future date; options, which give the owner the right but not obligation to buy or sell an asset; and swaps, which involve exchanging cash flows of one party's financial instrument for those of another party. Derivatives offer benefits like speculation, hedging risk, leverage, and flexibility, but also carry risks such as credit risk, potential for crimes, and impacting the leverage of an economy's debt.
DERIVATIVES MARKET
The document provides information on the futures trade process and differences between open outcry and electronic trading. In open outcry trading, brokers take orders in trading pits and execute trades through verbal communication or hand signals. In electronic trading, customers send orders directly to an electronic marketplace and trades are executed by traders accepting bids and offers on computer screens. Electronic trading allows greater price insight and faster trade execution and information dissemination.
Derivatives in India
Derivatives emerged to help farmers and traders manage risks and have since become important risk management tools. The derivatives market in India has grown significantly since liberalization in the 1990s. Derivatives allow participants to hedge risks, speculate, and engage in arbitrage. Common derivatives contracts include forwards, futures, options, and swaps. Traders use various strategies like spreads and straddles to limit risks and maximize returns based on their market outlook. While still growing, India's derivatives market is becoming a major global exchange.
Option Strategies
This document provides an overview of options strategies. It defines derivatives and describes how they derive value from underlying assets. Common types of derivatives are discussed including futures and options. Basic option positions like calls and puts are explained. Popular options strategies like bull call spreads, bear put spreads, and butterfly spreads are defined and examples are provided to illustrate how the payoffs work. Long straddles and short straddles are also introduced as strategies used when volatility is expected to increase or decrease. Key option terms are defined throughout like premium, strike price, expiration date, and different option types.
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The document discusses the derivatives market in India. It describes how derivatives were originally traded over-the-counter but exchanges were later created to provide transparency, reduce counterparty risk, and increase regulation. It then outlines the major derivatives exchanges in India and the types of derivatives contracts available, including those for commodities, equities, interest rates, and currencies. Finally, it explains the key components of how derivatives are traded on exchanges, including the order matching process, clearing, margins, and daily and final settlement.
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Fiscal policy
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
Derivatives market in india
1. The document discusses the growth and development of derivatives markets in India, including key milestones like SEBI permitting derivatives trading on Indian stock exchanges in 2000 and the introduction of various derivatives products over subsequent years.
2. It provides background on regulations governing derivatives trading in India and the objectives of regulation, including protecting investors and market integrity.
3. The document outlines the objectives of the study, which include understanding the Indian derivatives market scenario, analyzing whether derivatives have achieved their purpose, and suggesting methods based on observations. It discusses the scope and limitations of the study.
Monetary & fiscal policies
Monetary policy refers to credit control measures adopted by central banks using instruments like bank rate policy, open market operations, cash reserve ratio, and selective credit controls. Expansionary monetary policy eases credit conditions to boost aggregate demand during recessions, while restrictive policy curtails demand to control inflation. Fiscal policy uses taxation and public expenditure tools to achieve stabilization or growth. Crowding out occurs when increased government borrowing drives up interest rates, reducing private consumption and investment.
Fiscal ppt
The document summarizes India's fiscal policy. It discusses the objectives of fiscal policy including resource mobilization, efficient allocation of resources, reducing inequality, and price stability. It outlines the different stances a government can take - neutral, expansionary, or contractionary. It also discusses the instruments of fiscal policy including the budget, expenditures, taxation, and public debt. It provides an overview of the union and state budgets in India.
Financial market
The document discusses financial markets and provides details about capital markets and money markets. It defines a financial market as any marketplace where buyers and sellers trade financial securities and commodities. Capital markets deal with longer term financial instruments like stocks and bonds, while money markets facilitate short term borrowing and lending with maturities of one year or less, including treasury bills, certificates of deposit, and commercial paper. Both markets play important roles in raising capital and facilitating transactions.
Monetary and fiscal policy of india
The document discusses India's monetary and fiscal policy. It outlines the objectives, instruments, and factors that influence monetary policy such as maintaining price stability and economic growth. The key instruments of monetary policy discussed are cash reserve ratio, statutory liquidity ratio, repo rate, and reverse repo rate. Fiscal policy objectives include increasing capital formation and achieving desirable levels of growth, prices, employment, and income distribution. The main instruments of fiscal policy are taxation (direct and indirect taxes) and government expenditure. The document also discusses inflation in India and reviews of monetary policy by experts.
A Study of Derivatives Market in India
This document provides information about a project report submitted by Hardeep Singh Hundal to Karnataka University, Dharwad on "A Study of Derivatives Market in India". It includes a certificate from the director of Global Business School certifying the project work was completed at Hindustan Financial Services from April to June 2012 under the guidance of Dr. Ramakant Kulkarni and Mr. Shankar Habib. It also includes a declaration by Hardeep Singh Hundal and an acknowledgement of those who provided guidance and support. The executive summary provides an overview of the project work analyzing investor behavior and understanding derivatives markets in India.
Joint Stock Company
The document provides information on the types of joint stock companies. It discusses companies based on:
1) Method of formation - chartered, statutory, registered companies
2) Liability of members - companies limited by shares, guarantee, unlimited companies
3) Membership - private, public limited companies
4) Ownership - government companies
It also outlines the key characteristics and stages of promotion for establishing a joint stock company.
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What is the Meaning of Financial Derivatives
Financial derivatives are financial instruments linked to an underlying asset or indicator. Derivatives allow parties to trade financial risks independently from owning the underlying asset. There are several types of derivatives, including futures, forwards, options, and swaps. Futures are standardized forward contracts traded on an exchange. Options give the holder the right but not obligation to buy or sell the underlying asset. Swaps involve exchanging cash flows between two parties over time based on a notional principal amount. Derivatives are used by hedgers, speculators, and arbitrageurs to manage risk, seek profit, and exploit pricing discrepancies.
Derivatives
A derivative is a financial instrument whose value is derived from an underlying asset such as a stock, bond, commodity, or currency. Derivatives include futures, options, and swaps. There are three main types of traders in derivatives markets - hedgers who use derivatives to reduce risk, speculators who trade for profit, and arbitrageurs who take advantage of temporary price differences. Derivatives can be traded over-the-counter between two parties or on an exchange where they are standardized and require margin payments.
Financial Derivatives.pptx
Derivatives are financial instruments whose value is derived from an underlying asset. The three main types of derivatives are forwards, futures, and options. Forwards are customized contracts traded over-the-counter, while futures are standardized contracts traded on an exchange. Options give the holder the right but not obligation to buy or sell the underlying asset. Swaps involve exchanging cash flows of one party's financial instrument for those of another party. Derivatives allow parties to manage financial risks and speculate in the market.
“Commodity Treading & Future Option Maker”
1. SEBI is launching European-style commodity options in India, beginning with gold options. Unlike equity options which settle at the spot price, commodity options will settle at the futures price on expiry.
2. Options provide a cheaper alternative to futures contracts for hedging and speculation. They allow buyers limited risk for unlimited profit potential by paying an upfront premium to the option seller.
3. While options may increase participation and market liquidity, the impact may be limited without broad institutional participation which is currently restricted. Options will facilitate risk management for producers and speculation.
Introdaction of derivative market
Derivatives are financial instruments whose value is dependent on an underlying asset. The three main types of derivatives are forwards, futures, and options. Forwards and futures are contracts to buy or sell an asset at a future date at a predetermined price, while options provide the right but not obligation to buy or sell an asset at a strike price. Derivatives allow traders to hedge risk, reduce transaction costs, manage portfolios, and enhance liquidity in markets.
Introdaction of derivative market
Derivatives are financial instruments whose value is dependent on an underlying asset. The three main types of derivatives are forwards, futures, and options. Forwards and futures are contracts to buy or sell an asset at a future date at a predetermined price, while options provide the right but not obligation to buy or sell an asset at a strike price. Derivatives allow traders to hedge risk, reduce transaction costs, manage portfolios, and enhance liquidity. Key participants in derivatives markets include hedgers who offset risk, speculators who take on risk, and arbitrageurs who exploit pricing discrepancies across markets.
PPT Financial Derivatives, Scope and Importance
Derivatives are financial instruments whose value is derived from an underlying asset such as a stock, commodity, currency, or index. There are two main types of derivatives - over-the-counter (OTC) derivatives which are privately negotiated contracts between two parties, and exchange-traded derivatives which are standardized contracts traded on a public exchange. Derivatives allow parties to transfer risk from one to another and are used for hedging, speculation, and arbitrage. Common derivatives include forwards, futures, and options.
Financial derivatives
Derivatives are financial instruments whose value is derived from an underlying asset such as a commodity, currency, bond, or stock. There are several types of derivatives including forwards, futures, and options. A forward is a customized contract where the buyer agrees to purchase an asset at a set price on a future date. Futures are standardized forward contracts that are exchange-traded. Options provide the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before the expiration date.
Fm project
The document provides an overview of futures and options trading in India. It defines key terms like futures contracts, options, calls, puts, strike price, expiration date, premium etc. It explains how futures and options work, including the roles of buyers and sellers. It also outlines some advantages of futures trading like high leverage, ability to profit in rising and falling markets, and lower transaction costs compared to other investments. Finally, it provides a table showing the growth of index futures, stock futures, index options and stock options trading in India from 2000-2004 in terms of number of contracts, turnover and average daily turnover.
Derivatives project
1. The document discusses various derivatives trading concepts such as futures contracts, forward contracts, and options. It explains that futures contracts are standardized agreements to buy or sell an asset at a specified price on a future date, while forward contracts are customized agreements with physical delivery of the asset.
2. Options are described as contracts that give the buyer the right but not the obligation to buy or sell an asset at a specified price on or before the expiration date. The main types are calls, which are rights to buy, and puts, which are rights to sell.
3. Participants in futures markets are identified as hedgers who protect their positions, speculators who take risks seeking profits, and arbitrageurs who exploit
cash future forward market
This document discusses key concepts related to derivatives and risk management. It defines cash, futures, and forward markets. Cash markets involve immediate delivery, while futures are exchange-traded contracts to buy/sell an asset at a predetermined price on a predetermined date. Forwards are over-the-counter contracts between two parties with customized terms. Key differences between these markets include physical delivery requirements, margin requirements, regulation, and counterparty risk. The document also explains concepts like open interest, volume, and lifetime highs and lows.
PROFIT YOUR TRADE EDUCATION Series - By Kutumba Rao - Feb 7th 2021.pptx
Futures contracts obligate buyers and sellers to transact an underlying asset at a predetermined price and date. Weekly options contracts on stock indices like Nifty and Bank Nifty have grown in popularity as they allow traders to better participate in short-term price movements with lower premiums and gamma risk than monthly contracts. Top holdings in the Nifty 50 index are HDFC Bank at 11.21%, Reliance Industries at 11.17%, and HDFC at 7.23%, demonstrating their heavy weighting.
Mechanics & properties of options
1. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specified date.
2. Options have both buyers and writers, with buyers paying premiums for the rights conveyed and writers receiving premiums in exchange for taking on obligations.
3. The key factors that determine an option's premium are the underlying asset's price, the strike price, time to expiration, and expected volatility.
Futures & Options pdf for beginners. .pdf
- Derivative contracts derive their value from an underlying asset and allow investors to speculate on price movements without owning the asset. Common derivatives include futures, options, swaps, and forwards.
- An options contract gives the holder the right, but not the obligation, to buy or sell the underlying asset at a predetermined strike price by a certain expiration date. Options provide flexibility and can be used to take advantage of price changes or protect against losses.
- Key terms related to options include the strike price, which remains fixed, and moneyness, which describes the relationship between the strike price and current market price. Factors like time to expiration and volatility also impact options pricing.
Derivatives Handbook
The document provides information on derivatives trading in India, including:
1) It describes the main types of derivatives - futures, options, and their classifications.
2) It outlines the benefits of trading futures and options such as hedging risks, participating in markets with leverage, and facilitating price discovery.
3) It provides details on how to start trading derivatives by opening an account with a trading member and depositing the required collateral.
Financial derivatives ppt
A derivative is a financial instrument whose value is derived from the value of another asset, known as the underlying. There are three main types of traders in the derivatives market: hedgers who use derivatives to reduce risk, speculators who trade for profits, and arbitrageurs who take advantage of price discrepancies across markets. Derivatives can be traded over-the-counter (OTC) or on an exchange, and provide various economic benefits such as risk reduction and enhanced market liquidity.
Financialderivativesppt priyanka
A derivative is a financial instrument whose value is derived from the value of an underlying asset. Derivatives include forwards, futures, options, and swaps. Forwards and swaps are traded over-the-counter (OTC), while futures and options are traded on exchanges. Options give the holder the right but not obligation to buy or sell the underlying asset. Swaps involve exchanging cash flows of one asset for another at periodic intervals. Derivatives allow investors to hedge risk or speculate on price movements of the underlying asset.
Financialderivativesppt priyanka
A derivative is a financial instrument whose value is derived from the value of an underlying asset. Derivatives include forwards, futures, options, and swaps. Forwards and futures are contracts to buy or sell an asset at a future date, while options provide the right but not obligation to buy or sell. Swaps involve exchanging cash flows of one asset for another. Derivatives can be traded over-the-counter or on an exchange, with exchange-traded derivatives using standardized contracts.
Marketable securities
marketing of securities including basic definations and methods of marketing and types of risk involved etc for Bcom students
Derivatives lecture1& 2-introduction
Derivatives are financial instruments that derive their value from an underlying asset such as currencies, commodities, stocks or bonds. Common types of derivatives include forwards, futures, options, and swaps. Forwards and futures are agreements to buy or sell an asset at a future date for a predetermined price, while options provide the right but not obligation to buy or sell an asset. Swaps involve exchanging cash flows of financial instruments. Derivatives allow investors to hedge risk or speculate on changes in prices. They are traded on exchanges or over-the-counter.
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Derivatives
- 1. Financial Engineering By CA. Pradeep Kumar Gupta (CA., CS., B.com)
- 16. Comparison of forward and futures contract Forward Future Private Contract between two parties Traded on an exchange Not standardized Standardized Contract Usually one specified delivery date Range of delivery dates Settled at the end of contract Settled daily Delivery or final cash settlement usually takes place Contract is usually closed out prior to maturity Some credit risk Virtually no credit risk
- 22. Comparison between Call Option & Put Option Call Option Put Option Option which gives the holder right to BUY an assets but not an obligation to buy. Option which gives the holder right to SELL an assets but not an obligation to SELL. Call option will be exercise only when the exercise price is lower than the market price. Put option will be exercise only when the exercise price is Higher than the market price. Seller/writer is under obligation to sell the underlying assets if the buyer exercise his option to buy the shares . Seller/writer is under obligation to sell the underlying assets if the buyer exercise his option to sell the shares .
- 41. Comparison of Stock Market and commodity market Stock Market Commodity Market Future trading Settlement at Every Last Month of Thursday Different dates (As.Metal 5 th of the next month, Agriculture Product 20 th of the month, Electricity 15 th of the month) Time 9.30 to 3.30 10am to 11.55pm Monday to Friday Monday to Saturday Future trading available only upto 3 months Future trading available only upto 10-12 months Delivery not possible Delivery also possible. Top cities-Ahemdabad,Mumbai,Delhi. Top cities-Ahemdabad, Rajkoat,Indore Controlled by SEBI Controlled by FMC (forward Market Commission)