Derivatives is a contract or a product whose value is derived from value of some other asset known as underlying. Derivatives are based on wide variety of underlying assets.
Derivatives are derived from the underlying instrument such as paper assets – Shares or Bonds or Currencies, physical assets such as Gold, Silver, zinc, Lead, Copper, Soyabean, Crude Oil etc.,
For example, A Derivative of milk is ghee, curd, panner etc.,
The various derivatives include:
Financial assets like shares, bonds and currencies
Metals such as Gold, Silver, Zinc, Lead, Aluminum, Copper, Nickel, Tin, Platinum etc.
Energy such as Crude Oil, Natural Gas etc.
Agri Commodities such as Soyabean, Sugar, Wheat, Rice, Cotton, Coffee, Pulses etc.
We at Traders Hut intend to share the knowledge of financial world as ‘We believe sharing is caring‘
In our next educational series we would discuss on ‘Types of Derivatives Markets‘
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