Product Description
Derivatives are financial contracts or agreements that are based on external assets such as stocks, commodities, indices, currencies, and interest rates. The market speculates on the price of an asset in the future, and investment is made according to these market predictions. Derivative investments allow investors to pay an initial margin to a stockbroker instead of the full amount, which the buyer is obligated to pay only at a fixed date in the future. Profits are then derived from these instruments efficiently and consistently. Though Derivative Trading is a high-risk investment option, it also has the potential for high returns. It is used for hedging and leveraging of risks caused by volatile price movements in the market.
Types Of Derivatives Trading
01.
Futures
Financial contracts that bind the buyer to buy an item from the seller at a specified price on a specific day in the future. On stock markets, these contracts are exchanged.
02.
Options
Options contracts are derivatives that give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price on or before a specified date. The key elements of an options contract are the underlying asset, the strike price, and the expiration date. The contract also specifies whether it is a call or a put option.
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Benefits Of BBTCL Derivative Trading
Derivatives can be used to hedge against risk, such as the risk of changes in interest rates, currency exchange rates, or the price of commodities.