Shriram Insight Share Brokers Limited

Derivatives Trading

In the stock market, you can buy and sell shares of companies. Based on these shares, derivatives instruments are also traded on the market. These instruments are an agreement to buy or sell the underlying shares in the future. This agreement is sold in the market. They are called contracts. Derivative instruments are available for shares, indices, currencies as well as commodities. Their value is tied to the underlying security.

Types of Derivative Instruments:

Types of Derivative Instruments: There are two kinds of derivative instruments – futures and options. Futures are contracts or an agreement between two parties to either buy or sell a fixed quantity of assets at a particular time in the future for a fixed price. An option is also a similar contract, except the parties are not obligated to fulfill the terms of the agreement. These contracts are then traded in the market. The minimum value of a contract is Rs 2 lakh.

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