Please explain options and futures in simple terms and also derivatives? - derivatives options
Options and derivatives, futures markets are very complex terms, no one can explain in simple words to explain the options and futures?
In addition, terms such as option and put option with examples ...
Monday, December 28, 2009
Derivatives Options Please Explain Options And Futures In Simple Terms And Also Derivatives?
1 comment:
Is it not possible to explain everything about the options and futures contracts in a short paragraph in simple words, I give some important points.
Derivatives are financial instruments whose value of other instruments such as stocks, bonds, currencies or commodities. Options and futures are derivatives.
A futures contract is a contract to buy / sell the underlying assets (stocks, bonds, currencies, commodities) at a certain time in the future at a price agreed now. For example, if you buy a futures contract on oil in December, today, $ 112 and then, when the contract expires in December must buy a barrel of oil at $ 112. If you are in the sale of a futures contract and then a barrel of oil at $ 112 is for sale. There are many details, but I'm simplifying. In the event the buyer of a futures contract and the seller are required to accept the delivery and / DELIVER the underlying.
An option contract is similar to a futures contract, but an option allows the buyer the right to buy (call option) or sell (put option) the underlying instrument, on or before the fixed price, the exercise price or strike price known specified. Please note that the buyer has the right but not the obligation to exercise the option. In return for this right the buyer pays the seller a certain sum of money called a premium.
For more information, use Google and Wikipedia.
Post a Comment