Scribd Logo
Upload

Welcome to Scribd!

  • 1 Ribhav Financial Derivatives

    Uploaded by

    Vikas Goyal
    10 views7 pages
    The document discusses different types of financial derivatives including commodity derivatives and financial derivatives. It provides details on forwards and futures contracts, comparing the key differences between the two such as standardization, default risk, liquidity, price discovery, settlement processes, and margin requirements. It also lists types of financial futures contracts such as index futures and stock futures.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses different types of financial derivatives including commodity derivatives and financial derivatives. It provides details on forwards and futures contracts, comparing the key differences between the two such as standardization, default risk, liquidity, price discovery, settlement processes, and margin requirements. It also lists types of financial futures contracts such as index futures and stock futures.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    10 views7 pages

    1 Ribhav Financial Derivatives

    Uploaded by

    Vikas Goyal
    The document discusses different types of financial derivatives including commodity derivatives and financial derivatives. It provides details on forwards and futures contracts, comparing the key differences between the two such as standardization, default risk, liquidity, price discovery, settlement processes, and margin requirements. It also lists types of financial futures contracts such as index futures and stock futures.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 7

    Financial Derivatives

    Ribhav Gupta
    16/1009
    Chetan Gupta
    16/699
    Vikas Goyal
    16/584
    Divyank Gyanchandani
    16/640
    Commodity Derivatives Financial Derivatives

    Some tangible Intangible underlying


    underlying asset. asset.

    Traded on Multi Traded on BSE, NSE,


    Commodity Exchange United Stock
    (MCX) and National Exchange (USE) and
    Commodities and Metropolitan Stock
    Derivatives Exchange. Exchange (MSE).
    Forwards
    • CUSTOMISED
    • UNDERLYING ASSET
    • SYMMETRICAL RIGHTS AND OBLIGATIONS
    • NON-REGULATED
    • DEFAULT RISK
    • HELD TILL MATURITY
    • LIQUIDITY
    • SETTLEMENT OF CONTRACT
    Futures
    • STANDARDISED CONTRACT
    • EXCHANGE BASED TRADING
    • NO DEFAULT RISK
    • LIQUIDITY
    • MARGIN REQUIREMENT
    • SETTLEMENT MECHANISM
    Basis FORWARDS FUTURES
    Standardisation Private in nature, so Traded on an
    not standardised. exchange so are
    standardised.
    Default Risk High risk. Clearing houses
    minimise risk.
    Liquidity Low as they are not Liquidity is high as
    accessible to other other participants
    market participants. are accessible.
    Price discovery Not efficient. Efficient
    Settlement At the end of Settled day by day
    contract. until end of contract
    Margin No requirement for Both buyer and
    Requirements depositing margin seller
    money.
    Types of Financial Futures
    Index Futures
    • Underlying asset is a stock index like NIFTY or
    SENSEX.
    • Performance of a select number of stocks are
    analysed.
    • Stock Futures
    •When
      underlying asset provides no income

    When the underlying asset provides known income

    When the underlying asset known income yield

    You might also like