A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets—a benchmark. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset.
The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. These assets are commonly purchased through brokerages.
WHAT ARE THE TYPES OF DERIVATIVES THAT WE SUPPORT?
FUTURES
Futures or often knows as futures contract – is an agreement for buying and delivery of an asset on a predetermined date in future, between any participating parties for the transaction. The contracts are standardized and are generally used by investors to hedge risk or speculate asset prices. Futures transactions are commitment bound for all parties involved.
OPTIONS
It is also a contract between participating parties in the transaction for purchase or delivery of an asset on a date in future at an agreed-upon rate. However, with options buyer is not commitment bound and may choose to not partake in the transaction. While futures are bound commitments options are opportunities. It can be used for both hedging and speculating asset prices.
WHAT ARE ADVANTAGES OF TRADING IN DERIVATIVES MARKET?
» Encourage Market Efficiency – They isolate risks from the market by selling it to parties willing to put a price on it
» Measure Risks into units – These risk units are easily manageable and can be sold or transferred.
» Protection of Capital through hedging a risk – Risk can be transferred from one party to another
» Transaction costs are low – All transaction costs in the derivatives market are low
» Cost Efficiency – With options trading, you can gain access to additional market returns using existing underlying holdings
» Earn profit from bull, bear and a sideways market with options
» With our Arbitrage facilities, you can make multiple trades simultaneously on one asset for a profit with low risk due to price inequalities.
HOW CAN ANS HELP YOU?
» Expert care for customers
» Our trading platform is available across both NSE & BSE in a single window, providing you a full range of exchange services
» Anytime, Anywhere – Desktop and Mobile trading facilities available
» High-Speed Trade Execution
» Trading uptime 99.9%
» Customer support readily available both online and offline
» Telephonic inquiry service for the demat balance
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» Member of BSE since 2007