Derivative Means..!
Terminology - Share Market
Derivative is a security with a
price that is dependent upon or / derived from one or more underlying assets.
The derivative itself is a
contract between two or / more parties based upon the asset or / assets.
Its value is determined by
fluctuations in the underlying asset.
The most common underlying assets
include stocks, bonds, commodities, currencies, interest rates & market
indexes.
Derivatives either be traded
over-the-counter (OTC) or / on an exchange. OTC derivatives constitute the
greater proportion of derivatives in existence and are unregulated, whereas
derivatives traded on exchanges are standardized.
OTC derivatives generally have
greater risk for the counterparty than do standardized derivatives.
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