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What are various types of derivative instruments traded at NSE?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked almost 3 years ago

What are various types of derivative instruments traded at NSE?

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2 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

Futures : A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. All the futures contracts are settled in cash at NSE. Options : An Option is a contract which gives the right, but not an obligation, to buy or sell the underlying at a stated date and at a stated price. While a buyer of an option pays the premium and buys the right to exercise his option, the writer of an option is the one who receives the option premium and therefore obliged to sell/buy the asset if the buyer exercises it on him.

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Open uri20170510 32134 s5bvk0?1494421637 ARJUN PRATAP SINGH answered over 2 years ago

Dear Friend, as far as your query is concerned that What are various types of derivative instruments traded at NSE? Let me informed that There are two types of derivatives instruments traded on NSE; namely Futures and Options : Futures : A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. All the futures contracts are settled in cash at NSE. Options : An Option is a contract which gives the right, but not an obligation, to buy or sell the underlying at a stated date and at a stated price. While a buyer of an option pays the premium and buys the right to exercise his option, the writer of an option is the one who receives the option premium and therefore obliged to sell/buy the asset if the buyer exercises it on him. Options are of two types - Calls and Puts options : “Calls” give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. “Puts” give the buyer the right, but not the obligation to sell a given quantity of underlying asset at a given price on or before a given future date. All the options contracts are settled in cash. Further the Options are classifi ed based on type of exercise. At present the Exercise style can be European or American. American Option - American options are options contracts that can be exercised at any time upto the expiration date. Options on individual securities available at NSE are American type of options. European Options - European options are options that can be exercised only on the expiration date. All index options traded at NSE are European Options. Options contracts like futures are Cash settled at NSE. Hope answer was helpful to you Regards, Arjun Pratap Singh

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