Derivatives Trading
Derivatives trading involves buying and selling contracts like futures, options, swaps, and forwards. These contracts derive their value from underlying assets such as stocks, commodities, currencies, or interest rates. The buyer of a derivative can either take delivery of the asset at contract maturity or offset it by entering into an opposite contract. Derivatives can be traded on exchanges or over-the-counter (OTC) markets. These instruments allow traders to hedge risk, speculate on price movements, or gain exposure to various assets without directly owning them.
Related Terms
Beta Coefficient
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Deferred Tax
Deferred tax in financial statements denotes future tax liabilities or tax assets stemming from temporary...
Doji Pattern
A Doji is a candlestick pattern that occurs when the open and close prices of...
Defensive Stock
A defensive stock refers to shares of companies that provide stable and consistent returns and...
Cash Flow Statement
A cash flow statement tracks a business’s cash inflows and outflows over a specific period,...
Floating Interest Rate
A floating interest rate is an interest rate that fluctuates over the tenure of a...
