Answer Posted / rajan sevak
Forwards: A forward contract is a customized contract
between two entities, where settlement takes place on a
specific date in the future at today's pre-agreed price.
Futures: A futures contract is an agreement between two
parties to buy or sell an asset at a certain time in the
future at a certain price. Futures contracts are special
types of forward contracts in the sense that the former are
standardized exchange-traded contracts.
Options: Options are of two types - calls and puts. Calls
give the buyer the right but not the obligation to buy a
given quantity of the underlying asset, at a given price on
or before a given future date. Puts give the buyer the
right, but not the obligation to sell a given quantity of
the underlying asset at a given price on or before a given date.
Swaps: Swaps are private agreements between two parties to
exchange cash flows in the future according to a prearranged
formula. They can be regarded as portfolios of forward
contracts. The two commonly used swaps are:
Interest rate swaps: These entail swapping only the
interest related cash flows between the parties in the same
currency.
Currency swaps: These entail swapping both principal and
interest between the parties, with the cash flows in one
direction being in a different currency than those in the
opposite direction.
Warrants: Options generally have lives of upto one year, the
majority of options traded on options exchanges having a
maximum maturity of nine months. Longer-dated options are
called warrants and are generally traded over-the-counter.
LEAPS: The acronym LEAPS means Long-Term Equity Anticipation
Securities. These are options having a maturity of upto
three years.
Baskets: Basket options are options on portfolios of
underlying assets. The underlying asset is usually a moving
average or a basket of assets. Equity index options are a
form of basket options.
Swaptions: Swaptions are options to buy or sell a swap that
will become operative at the expiry of the options. Thus a
swaption is an option on a forward swap. Rather than have
calls and puts, the swaptions market has receiver swaptions
and payer swaptions. A receiver swaption is an option to
receive fixed and pay floating. A payer swaption is an
option to pay fixed and receive floating.
Is This Answer Correct ? | 15 Yes | 2 No |
Post New Answer View All Answers
---------is the main or principle book of accounts
i want report country wise with invoice number for gl account
where we have file E-returns in SAP FICO-CIN/Wtax?
You have joined company yesterday then you are Appling B1 visa today. why so urgent.
if not found suitable for the post applied for, are you willing to be considered for a lower post yes / no ? why?
Why closing stock appears both in trading and Balance sheet? Why does it doesnot appear in trail balance.
What do you define in customizing for the payment program? FBZP (Any 2 Answer) • Bank subaccount ( BANK DETRMINATION SCREEN. ACCOUNTS) • Forms of the payment media ( PAYING COMPANY CODE) • Available amount (BANK DETERMINATION, AMOUNTS) • Assignments for the profit center • Prerequisites for the debit balance check
what is the meaning of Processing Vendor/Employee payments
what is budgetory control and what are the types
what is the good prasentation on interview
differnce between the 4.7 & 6.0 versions?
how to entry in tally for other person check received
helo sir, i want to know the writen exam pattern for finance and accounts ang general apptitude test of ongc.
Is advance paid wages has credit balance?
Is commodities transaction tax a permissible business expenditure? Explain