Derivatives

management

- PRATEEK SINGH
- III rd sem
 1000 k.g rice (asset)

A B
Rs. 50000/-
Todays date

Delivery of 1000 k.g rice

A B
Payment - Rs 50000/-
Future date
DERIVATIVES…..
The Derivative indicates that it
has no independent value i.e, its value is entirely
derived from the value of the “ UNDERLYING
ASSETS “
e.g : the “underlying assets” can be
securities ,commodities, bullion, currency, live
stocks, anything
Derivatives in simple terms means exchange of
goods for money where:
four things are satisfied

1) quantity of Underlying Assets. Todays date

2) price of underlying assets.

3) delivery of underlying assets. Future date

4) payment for underlying assets.
Types of derivatives

• 1) FORWARD
• 2) FUTURES
• 3) OPTIONS
• 4) SWAPS
OBJECTIVE

OF

DERIVATIVES
background
Collapse of U.S economy.

“ LEHMAN BROTHER “
 1000 k.g rice 1000 k.g RICE

X A B

Rs. 45000/- Rs. 50000/-

profit
Rs 5000/-

Here we can see that mr A is making a profit of rs. 5000/- 7 it mr. A did’t went to
mr.X for re ducing his risk of delivery but also he is making a profit from that
THANK YOU