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Derivatives
A derivative is a deal between two or more parties that are based on a set of assets. Traders mostly use derivatives to predict the future price movements of core assets, without buying the actual assets itself, in the hope of gaining a profit.
Businesses/traders also use derivatives for defending purposes, to cut risk against another position they’ve acquired in the market.
There are ample assets that are employed to form the basis of derivatives trading, permitting traders/businesses to take positions on shares, bonds, interest rates, commodities, indices, shares, and currencies.
What’s more, derivative helps traders take both short & long positions on assets like a stock, allowing them to forecast whether a share price will increase or decrease in the future.
India’s derivative market has been gaining popularity since 2000 and the profits can be seen in the daily turnover in the derivatives segment. With future-wise wealth management, you surely get a chance to enter the derivative market and gain success.
Advantages Of Derivatives
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Used in risk management
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Determines & corrects the prices of underlying assets
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Transfer risks to other parties
