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what is derivatives?
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It can be defined as something which derives its value from
an underlying product being a stock,currency,or anything
that carries a market price.The market price is subject to
fluctuations due to vapour factors defeating its demand and
supply there by associating itself to various stand alone
factors. So derivatives is a by-product of the core
product,which can be used to hedge, speculate and also
undertake arbitrage activities.
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Answer / ravinder.sunkara
derivatives are financial contracts or financial instruments, whose prices are derived from the price of something else (known as underlying ) THE underlying prise on which a derivative is based can be that of an asset
ex: commodities equity , residential mortgage ,commercial, real estate loan, bonds
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Answer / venkateswar reddy
Dervative is a instrument through which we can derive the
value.
That instrument is called underlying asset, through which
we can derive the value.
Derivatives can be divided into 2
one is Futures and another one is options
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Answer / babhu kanchupalli(dms)
Derivative is an asset which value is derived from the another asset called underlying asset.
For example : A&B made a bet on cricket match for 500 rc.Indirectly it means they are entering into a contract.Here this contract is called a derivative value of 500.The execution of this contract is depends on the match result.one person gain will be the another person loss vice versa.The match result is the underlying asset.
Futures,forwards,options,swaps are the examples of financial derivatives.
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