09 April,2024
Understanding Derivatives
Let us begin by answering the most obvious question – “What is a derivative?” Derivatives are financial tools whose worth is determined (or derived) by the movements of an underlying asset, which could be stocks, bonds, commodities, or market indices. They serve as contracts between two parties, enabling them to buy or sell the underlying asset at a predetermined price on or before a specified date. Essentially, derivatives allow you to bet on the future price movements of assets without owning them outright.
