Derivatives Trading

Derivatives trading

Derivatives, such as options or futures, are financial contracts, which derive their value off a spot price time-series, which is called the under-lying". For example, wheat farmers may wish to contract to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction would take place through a forward or futures market. This market is the "derivative market", and the prices on this market would be driven by the spot market price of wheat which is the "underlying". The terms "contracts" or "products" are often applied to denote the specific traded instrument.

The term Futures refers to an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange traded contracts.

An option is the right, but not the obligation, to buy or sell something at a stated date at a stated price. A "call option" gives one the right to buy; a "put option" gives one the right to sell.

Presently, NSE and BSE are offering Derivatives Products based on their indexes as well as few selective stocks. By enrolling as a client with group Vishwas Fincap, a client may avail of the opportunity to trade on derivatives segment of NSE as well as BSE.