Derivatives are financial instruments that derive their value from an underlying asset such as stocks, bonds, currencies or commodities. There are several types of derivatives including forwards, futures, options and swaps. Forwards and swaps are traded over-the-counter (OTC) while futures and options are traded on organized exchanges. Derivatives allow participants to hedge risk, speculate, or seek arbitrage opportunities. While derivatives can help manage various risks, they also pose risks such as leverage, increased speculation, and complexity that can be difficult for retail investors to navigate. The derivatives market has various participants including hedgers who seek to reduce risk, speculators who take risks to earn profits, and arbitrageurs who exploit pricing
Currency Derivatives with HDFC securities is easy, seamless and online. Know the benefits of Trading in Currency Derivatives and How to trade in Currency Derivatives. More on HDFC securities.
Currency Derivatives with HDFC securities is easy, seamless and online. Know the benefits of Trading in Currency Derivatives and How to trade in Currency Derivatives. More on HDFC securities.
Describes what derivatives are and explains the differences between over-the-counter and exchange traded derivatives, Identifies types of underlying assets on which derivatives are based, describes participants in and uses of derivative trading, describe what options are and how they are traded, evaluates call and put option strategies for
individual and in-stitutional investors and corporations, describes what forwards are, distinguishing futures contracts from forward agreements, evaluate futures strategies for investors and corporations, Define and describe rights and warrants, explain why they are issued, and calculate the value of rights and warrants
This is a partial preview of the document found here:
https://flevy.com/browse/business-document/financial-derivatives-103
Description:
Along with the basics of various financial derivatives required for risk management, it also covers various hedging strategies, comparisons, option valuation and brief on forward rate agreements.
CALL AND PUT OPTIONS
An option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price.
The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the corresponding obligation to fulfill the transaction.
Describes what derivatives are and explains the differences between over-the-counter and exchange traded derivatives, Identifies types of underlying assets on which derivatives are based, describes participants in and uses of derivative trading, describe what options are and how they are traded, evaluates call and put option strategies for
individual and in-stitutional investors and corporations, describes what forwards are, distinguishing futures contracts from forward agreements, evaluate futures strategies for investors and corporations, Define and describe rights and warrants, explain why they are issued, and calculate the value of rights and warrants
This is a partial preview of the document found here:
https://flevy.com/browse/business-document/financial-derivatives-103
Description:
Along with the basics of various financial derivatives required for risk management, it also covers various hedging strategies, comparisons, option valuation and brief on forward rate agreements.
CALL AND PUT OPTIONS
An option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price.
The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the corresponding obligation to fulfill the transaction.
The PowerPoint presentation on derivatives and their various types, such as futures, options, swaps, and hedging, provides a comprehensive understanding of these financial instruments and their applications in risk management and investment strategies. The presentation begins by explaining the concept of derivatives, highlighting their role in managing price fluctuations, mitigating risks, and maximizing investment opportunities. It then delves into the different types of derivatives, starting with futures contracts that enable parties to buy or sell assets at predetermined prices and dates. The presentation further explores options, which grant the right but not the obligation to buy or sell assets, and swaps, which involve the exchange of cash flows based on predefined conditions. Additionally, it covers hedging, a risk management technique that uses derivatives to offset potential losses in investments. With clear explanations and illustrative examples, this presentation equips the audience with the knowledge necessary to navigate the world of derivatives and employ them effectively in financial decision-making.
Descriptions and explanation of all types of derivative instruments to trade with on the capital market.
http://www.koffeefinancial.com/Static/Learn.aspx
Describes what derivatives are and explains the differences between over-the-counter and exchange-traded
derivatives, Identify types of underlying assets on which derivatives are based, describes the participants in and use of derivative trading, describes what options are and how they are traded, and evaluate call and put option strategies for
individual and institutional investors and corporations.
5. Describe what forwards are, distinguish futures contracts from forward agreements, and evaluate
futures strategies for investors and corporations, define and describe rights and warrants, explaining why they are issued,
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
2. INTRODUCTION
• The term “derivatives” is used to refer to financial instruments which
derive their value from some underlying assets.
• The underlying assets could be equities (shares), debt (bonds, T-bills,
and notes), currencies, and even indices of these various assets, such
as the Nifty 50 Index.
• Derivatives contracts are bought and sold by a large number of
individuals, institutions and other’s for a variety of purposes.
• When the price of the underlying changes, the value of the derivative
also changes.
• A Derivative is not a product. It is a contract that derives its value
from changes in the price of the underlying. Example : The value of a
gold futures contract is derived from the value of the underlying asset
i.e. Gold.
3. DEFINITION
• According to Securities Contracts (Regulation) Act, 1956
{SC(R)ACT derivatives is:
• A security derived from a debt instrument, share, loan, whether
secured or unsecured, risk instrument or contract for differences or
any other form of security.
• A contract which derives its value from the prices, or index of
prices, of underlying securities.
• Derivatives are securities under the Securities Contract (Regulation)
Act and hence the trading of derivatives is governed by the
regulatory framework under the Securities Contract (Regulation)
Act.
4.
5.
6.
7.
8. FUNCTIONS OF DERIVATIVES MARKET
• Risk management- Stop loss
• Transfer of risk
• Price discovery
• Transitional efficiency - low transaction cost
compare to rest like, brokerage, commission,
regulatory costs and margin requirements
• Financial Engineering- as it is new field
creating calls, puts, futures and other
derivatives
9.
10. ADVANTAGES OF DERIVATIVES
• Since all transactions related to derivatives take place in future it provides
individuals with better opportunities because an individual who want to
short some stock for long time can do it only in futures or options hence the
biggest benefit of this is that it gives numerous options to an investor or
trader to execute all sorts of strategies.
• In derivatives market people can transact huge transactions with small
amounts and therefore it gives the benefit of leverage and hence even
people who have less amount of money can enter into this market.
• Intraday traders get the benefit of liquidity as these contracts are very
liquid and also the costs such as basis expense, brokerage are less as
compared to cash market.
• It is a great risk management tool and if applied judiciously it can produce
good results and benefit its user.
11. DISADVANTAGES OF DERIVATIVES
• Leverage is a double edged sword and therefore if you do not get it
right chances are you wound end up losing huge amount of money
because these contracts have specific maturities and on that date
they get expired unlike cash market where you can hold on to stocks
for long period of time.
• Since its inception many critics have been blaming derivatives for
huge fall which keeps happening frequently after the introduction of
derivatives and many people say that it increases unnecessary
speculation in the market which is not good for the small retail
investors who are the backbone of stock market.
• It is quite complex and various strategies of derivatives can be
implemented only by an expert and therefore for a layman it is
difficult to use this and therefore it limits its usefulness
13. HEDGERS
• Hedge is the position taken in derivative exchange/markets
for the purpose of reducing risk. A person who takes such
position is called hedger.
• A hedger uses the derivatives market to reduce risk caused by
movement in prices of shares/securities, commodities,
exchange rates, interest rate, indices, etc.
• The position taken by hedger is opposite to the risk he is
exposed.
• Taking an opposite position to the risk exposure is called
hedging strategy
14. SPECULATORS
• A speculator may be defined as a investor who is
willing to take a risk by taking derivatives position
with the expectation to earn profits.
• The speculator forecasts the future economic
conditions and decides which position (long or short)
to be taken will yield a profit if his forecast is correct
15. ARBITRAGEUR
• An arbitrageur is an intelligent trader who attempts to
make profits in a derivatives market by
simultaneously entering into two transaction at a time
in two different markets and takes advantage of the
difference in pricing.
• The arbitrage opportunities available in two markets
usually do not last long because of heavy transaction
by arbitrageur when such opportunity arises.
16. TYPES OF DERIVATIVE MARKETS
• Exchange Traded Derivatives: Derivatives which
are traded on an exchange are called exchange traded
derivatives. Trades on an exchange generally take
place with anonymity i.e. buyer and seller do not
know each other. Generally go through the clearing
corporation. E.g. S&PCNX nifty futures, OPTINDX
nifty.
• OTC Derivatives: A derivative contract which is
privately negotiated is called the OTC derivative.
OTC trades have no anonymity and they generally do
not go through a clearing corporation. E.g. foreign
exchange transaction between banks and its cliants.
17.
18. What is a Forward?
• A forward is a contract in which one party commits to buy and the
other party commits to sell a specified quantity of an agreed upon
asset for a pre-determined price at a specific date in the future.
• It is a customized contract, in the sense that the terms of the contract
are agreed upon by the individual parties.
• Hence, it is traded OTC.
Risks in Forward Contracts
• Credit Risk – Does the other party have the means to pay?
• Operational Risk – Will the other party make delivery? Will the
other party accept delivery?
• Liquidity Risk – Incase either party wants to opt out of the contract,
how to find another counter party?
Terminology
• Long position - Buyer
• Short position - seller
• Spot price – Price of the asset in the spot market.(market price)
• Delivery/forward price – Price of the asset at the delivery date
19.
20. What are Futures?
• A future is a standardized forward contract.
• It is traded on an organized exchange.
• Standardizations- - quantity of underlying - quality
of underlying(not required in financial futures) -
delivery dates and procedure - price quotes
• Types of Futures Contracts
• Stock Futures Trading (dealing with shares)
• Commodity Futures Trading (dealing with gold
futures, crude oil futures)
• Index Futures Trading (dealing with stock market
indices)
21.
22. Terminology
• Contract size – The amount of the asset that has to be
delivered under one contract. All futures are sold in multiples
of lots which is decided by the exchange board. Eg. If the lot
size of Tata steel is 500 shares, then one futures contract is
necessarily 500 shares.
• Contract cycle – The period for which a contract trades. The
futures on the NSE have one (near) month, two (next) months,
three (far) months expiry cycles.
• Expiry date – usually last Thursday of every month or
previous day if Thursday is public holiday.
• Strike price – The agreed price of the deal is called the strike
price.
• Cost of carry – Difference between strike price and current
price.
23. Margins
• A margin is an amount of a money that must be deposited with the
clearing house by both buyers and sellers in a margin account in order to
open a futures contract.
• It ensures performance of the terms of the contract.
• Its aim is to minimise the risk of default by either counterparty.
• Initial Margin - Deposit that a trader must make before trading any
futures. Usually, 10% of the contract size.
• Maintenance Margin - When margin reaches a minimum maintenance
level, the trader is required to bring the margin back to its initial level.
The maintenance margin is generally about 75% of the initial margin
Marking to Market
• This is the practice of periodically adjusting the margin account by
adding or subtracting funds based on changes in market value to reflect
the investor’s gain or loss.
• This leads to changes in margin amounts daily.
• This ensures that there are no defaults by the parties.
24.
25. Options
• Contracts that give the holder the option to buy/sell specified
quantity of the underlying assets at a particular price on or before a
specified time period. The word “option” means that the holder
has the right but not the obligation to buy/sell underlying assets.
Types of Options
• Options are of two types – call and put.
• Call option give the buyer the right but not the obligation to buy a
given quantity of the underlying asset, at a given price on or before a
particular date by paying a premium.
• Puts give the buyer the right, but not obligation to sell a given
quantity of the underlying asset at a given price on or before a
particular date by paying a premium.
Types of Options
• The other two types are – European style options and American
style options.
• European style options can be exercised only on the maturity date of
the option, also known as the expiry date.
• American style options can be exercised at any time before and on
the expiry date
26.
27.
28. Features of Options
• A fixed maturity date on which they expire. (Expiry
date).
• The price at which the option is exercised is called
the exercise price or strike price.
• The person who writes the option and is the seller is
referred as the “option writer”, and who holds the
option and is the buyer is called “option holder”.
• The premium is the price paid for the option by the
buyer to the seller.
• A clearing house is interposed between the writer and
the buyer which guarantees performance of the
contract.
29. Options Terminology
• Underlying: Specific security or asset.
• Option premium: Price paid.
• Strike price: Pre-decided price.
• Expiration date: Date on which option expires.
• Exercise date: Option is exercised.
• Open interest: Total numbers of option contracts that have
not yet been expired.
• Option holder: One who buys option.
• Option writer: One who sells option.
• Option class: All listed options of a type on a particular
instrument. Option series: A series that consists of all
the options of a given class with the same expiry date and
strike price.
• Put-call ratio: The ratio of puts to the calls traded in the
market.
30. SWAPS
• In a swap, two counter parties agree to enter into a
contractual agreement wherein they agree to
exchange cash flows at periodic intervals.
• Most swaps are traded “Over The Counter”.
• Some are also traded on futures exchange market.
Types of Swaps
• There are 2 main types of swaps:
• Plain vanilla fixed for floating swaps or simply
interest rate swaps.
• Fixed for fixed currency swaps or simply currency
swaps
31. Interest Rate Swap
• A company agrees to pay a pre-determined fixed interest rate on a
notional principal for a fixed number of years.
• In return, it receives interest at a floating rate on the same notional
principal for the same period of time.
• The principal is not exchanged. Hence, it is called a notional
amount.
Floating Interest Rate
• LIBOR – London Interbank Offered Rate
• It is the average interest rate estimated by leading banks in London.
• It is the primary benchmark for short term interest rates around the
world.
• Similarly, we have MIBOR i.e. Mumbai Interbank Offered Rate.
• It is calculated by the NSE as a weighted average of lending rates of
a group of banks.
32. Currency Swap
• It is a swap that includes exchange of principal and
interest rates in one currency for the same in another
currency.
• It is considered to be a foreign exchange transaction.
• It is not required by law to be shown in the balance
sheets.
• The principal may be exchanged either at the
beginning or at the end of the tenure.
• However, if it is exchanged at the end of the life of
the swap, the principal value may be very different.
• It is generally used to hedge against exchange rate
fluctuations.
33. The other kind of derivatives, which are not, much popular
are as follows :
• BASKETS -
Baskets options are option on portfolio of underlying asset. Equity Index Options
are most popular form of baskets.
• LEAPS –
Normally option contracts are for a period of 1 to 12 months. However, exchange
may introduce option contracts with a maturity period of 2-3 years. These long-term
option contracts are popularly known as Leaps or Long term Equity Anticipation
Securities.(created by investor who writes an option and keep the premium as
income)
• WARRANTS -
Options generally have lives of up to one year, the majority of options traded on
options exchanges having a maximum maturity of nine months. Longer-dated
options are called warrants and are generally traded over-the-counter.(directly
issued by the company)
• SWAPTIONS -
Swaptions are options to buy or sell a swap that will become operative at the
expiry of the options. Thus a swaption is an option on a forward swap. Rather than
have calls and puts, the swaptions market has receiver swaptions and payer
swaptions. A receiver swaption is an option to receive fixed and pay floating. A
payer swaption is an option to pay fixed and receive floating.