What are Derivatives in Financial Market?

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What are Derivatives in financial market ?
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Introduction
A derivative is a financial instrument. It
contains trading through Future contracts,
Options and others. Part of share market tips
daily recommendations to hedge against inflation.
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Continue
A derivative can be define as a financial
instrument whose value depends on (or derives
from) the values of other, more basic, underlying
variables. Very often the variables
underlying derivatives are the prices of traded
assets. However, derivatives can be dependent on
almost any variable. Can be traded Intraday
as per Intraday tips experts.
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Future Contracts

• A futures contract is an agreement between two
  parties to buy or sell an asset at a certain time
  in the future for a certain price.
• Unlike forward contracts, futures contracts are
  normally traded on an exchange.
• To make trading possible, the exchange specifies
  certain standardized features of the contract.

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Options

• Options are traded both on exchanges and in the
  over-the-counter market.
• There are two types of option
• Call option gives the holder the right to buy
  the underlying asset by a certain date for a
  certain price.
• Put option gives the holder the right to sell
  the underlying asset by a certain date for a
  certain price.

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Options

• The price in the contract is known as the
  exercise price or strike price.
• The date in the contract is known as the
  expiration date or maturity.

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Others

• Other derivatives includes
• Forward Contracts
• Swaps

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