{"id":1573,"date":"2026-08-06T05:58:59","date_gmt":"2026-08-06T05:58:59","guid":{"rendered":"https:\/\/materials.simplycurrentaffairs.com\/?p=1573"},"modified":"2026-08-13T06:00:44","modified_gmt":"2026-08-13T06:00:44","slug":"derivatives","status":"publish","type":"post","link":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/2026\/08\/06\/derivatives\/","title":{"rendered":"Derivatives"},"content":{"rendered":"\n

Derivatives<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/mark><\/strong><\/h2>\n\n\n\n

About<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/mark><\/strong><\/h3>\n\n\n\n
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  • Derivatives refers to the financial instruments which derive their value from an underlying security or financial instrument. <\/strong>The underlying products can be equity, commodity, currency, etc.<\/strong>\u00a0<\/li>\n\n\n\n
  • The basic principle behind entering into derivative contracts is to earn profits by speculating on the value of the underlying asset in future.<\/strong><\/li>\n<\/ul>\n\n\n\n

    Types of Derivatives:<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/mark><\/strong><\/h4>\n\n\n\n
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    • Most common types of derivative instruments are forwards, futures, options, and swaps.<\/strong>\u00a0\n
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      • Options: <\/strong>Options are derivative contracts that give the buyer a right to buy\/sell the underlying asset at the specified price during a certain period of time. The buyer is not under any obligation<\/strong> to exercise the option.\u00a0\u00a0<\/li>\n\n\n\n
      • Futures:<\/strong> Futures are standardised contracts that allow the holder to buy\/sell the asset at an agreed price at the specified date. The parties to the futures contract are under an obligation <\/strong>to perform the contract.\u00a0\u00a0<\/li>\n\n\n\n
      • Forwards: <\/strong>Forwards are like futures contracts wherein the holder is under an obligation to perform<\/strong> the contract. But forwards are unstandardised <\/strong>and not traded on stock exchanges.<\/strong> These are available over-the-counter and are not marked-to-market.\u00a0\u00a0<\/li>\n\n\n\n
      • Swaps:<\/strong> Swap derivatives allow two parties to let go of their current financial instruments\u2019 liabilities or cash flows by swapping them with other liabilities or cash flows from a different financial instrument.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

        Derivatives About Types of Derivatives:<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-1573","post","type-post","status-publish","format-standard","hentry","category-economy"],"_links":{"self":[{"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/posts\/1573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1573"}],"version-history":[{"count":2,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/posts\/1573\/revisions"}],"predecessor-version":[{"id":1575,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/posts\/1573\/revisions\/1575"}],"wp:attachment":[{"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/materials.simplycurrentaffairs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}