Elearnmarkets - Financial Market Learning
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
No Result
View All Result
Home Derivatives
22 Commonly used Terms in Derivatives Market 1

22 Commonly used Terms in Derivatives Market

Elearnmarkets by Elearnmarkets
November 29, 2022
in Derivatives
Reading Time: 4 mins read
0
5.7k
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

Hindi: आप इस लेख को हिंदी में भी पढ़ सकते है|

Learn about Derivatives:

  • When dealing in the stock market, you must have heard the term “Derivatives”
  • A derivative is an agreement between two parties, which derives its value from an underlying asset, which may be stocks, currency, commodities, etc.
  • It is mainly used as a tool for hedging, speculating as well as arbitraging.
  • The common types of derivatives are options, futures, forwards, and swaps.

Let us understand the most common terminology which is associated with the derivatives market:

Derivative

For detailed understanding of derivatives, you can also refer to the link here: Certification in Online Derivatives Demystified

  1. American Style Option: A type of option that can be exercised at any time unlike the European Style option which can only be exercised at expiry
  2. At-the-Market: A kind of financial transaction where the order to buy or sell is executed at the current market price.
  3. At-the-Money Spot: An option whose strike price is equal to the current market price in the cash spot market.
  4. At-the-Money Forward: An option whose strike price is equal to the current market price in the forward market.
  5. Call Option: It is a financial contract that gives the owner the right but not the obligation to buy a specific amount of the underlying financial instrument at a particular price with a specific date of maturity.
  6. Commodity Swap: A contract in which counterparties agree to exchange payments related to indices, at least one of is a commodity index.
  7. Currency Swap: A currency swap involves the exchange of an interest in one currency for the same in another currency.
  8. Delta: The change in the financial instrument’s price to changes in the price of the underlying cash index.
  9. Equity Swap: A contract in which counterparties agree to exchange payments related to indices, at least one of which is an equity index.
  10. European Style Option: An option that can be exercised only at expiry as opposed to an American Style option
  11. Forward Contracts: An over-the-counter obligation to buy or sell a financial instrument that is settled privately between the two counterparties.
  12. Futures Contracts: An exchange-traded obligation to buy or sell a financial instrument.
  13. Gamma: The degree of curvature in the financial contract’s price curve to its underlying price.
  14. Hedge: A transaction that offsets an exposure to fluctuations in financial prices of some other contract or business risk.
  15. In-The-Money Spot: An option with positive intrinsic value with respect to the current market spot rate.
  16. In-The-Money-Forward: An option with positive intrinsic value with respect to the current market forward rate.
  17. Option: The right but not the obligation to buy (sell) some underlying cash instrument at a specific rate on a particular expiration date.
  18. Premium: The cost associated with a derivative contract, referring to the combination of intrinsic value and time value.
  19. Put Option: A put option is a financial contract giving the owner the right but not the obligation to sell a particular amount of the underlying financial instrument at a pre-set price.
  20. Spot: The price in the cash market for delivery using the standard market convention.
  21. Strike Price: The price at which the holder of a derivative contract exercises his right.
  22. Theta: The sensitivity of a derivative product’s value to changes in the date, all other factors staying the same.

We hope now you will able to understand the derivatives terms when dealing in the same.

Happy Learning!

BOTTOMLINE

Join TMP Join TMP Join TMP

Gather the basics of Derivatives Market from Elearnmarkets in the course Derivatives Made Easy.

Also Check Stockedge to get updated Financial Market scenarios and start investing with reduced risk.

Tags: basicderivative marketderivativesenglishfutures and optionsoption greeksoptions
ShareTweetSend
Previous Post

एटीएम (ATM) मशीन से धनराशि कैसे निकालें?

Next Post

22 महत्वपूर्ण बैंकिंग टर्म्स जिन्हें आपको जानना आवश्यक है

Elearnmarkets

Elearnmarkets

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. You can connect with us on Twitter @elearnmarkets.

Related Posts

A Complete Guide on Options Trading 2
Derivatives

A Complete Guide on Options Trading

April 28, 2023
46.7k
Decoding Volatility Skew and Smile in Stock Market Trading 3
Derivatives

Decoding Volatility Skew and Smile in Stock Market Trading

April 26, 2023
517
Understanding Put-Call Ratio 4
Derivatives

Understanding Put-Call Ratio

April 24, 2023
1.2k
Decoding Maximum Pain Theory in Options Trading  5
Derivatives

Decoding Maximum Pain Theory in Options Trading 

April 21, 2023
1.4k

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

Facebook-f Twitter Instagram Linkedin-in Youtube Telegram

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

Download App

Categories

  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Technical Analysis
  • Marketshala
  • Miscellaneous

Popular On Elearnmarkets

  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati

© 2023 Elearnmarkets. All Rights Reserved

  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling
  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

Get Elearnmarkets App

No Result
View All Result
  • Article Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • Hindi
    • Bengali
    • English
  • Courses
  • Webinars

© 2020 Elearnmarkets All Rights Reserved