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Basics of Capital Market

FAQs

What does trading in derivatives mean?

A derivative is a monetary security with a worth that is dependent upon a basic resource or gathering of resources. The most well-known resources for subsidiaries are stocks, securities, commodities, monetary forms and market records. These resources are regularly purchased through financiers. Derivatives can be exchanged or bought and sold as per certain decided agreements and this exchange is referred to as trading in derivatives.

Can company trade in derivatives?

Yes, a company can exchange derivatives. This can also be done without being enlisted as NBFC. To establish a NBFC, a company needs to experience a 50-50 test, on the off chance that a company falls under this test, at that point, that company will be enlisted as NBFC by RBI.

Are derivatives bad?

The widespread trading of these instruments is both advantageous and risky on the grounds that in spite of the fact that derivatives can alleviate portfolio hazard, organizations that are exceptionally utilized can endure gigantic losses if their positions move against them. Financial specialists utilize the influence managed by derivatives as a method for expanding their venture returns. At the point when utilized appropriately, this objective is met.

What are the types of derivatives?

What are the advantages of derivatives?

How do derivatives affect the market?

What is the difference between a hedge and a derivative?

What are OTC derivatives?

What are the characteristics of derivatives?

What are the major features of derivative market?