DERIVATIVES
PRESENTED BY
JAYA KANESH R
R.BUPATHY & CO.,
CHARTERED ACCOUNTANTS
DERIVIATIVES
A Derivative is a product whose value is
derived from the value of one or more
underlying asset.
Eg:
– Equity
– Forex
– Commodity
– Currencyor
– Any Other Asset
MARKET INDEX
An Index is a number which measures the
change in a set of values over a period of time
The base value of Nifty on the start date of
November 3, 1995 is 1000 Points
Every stock price moves for 2 Major reasons
● News about the Company
● News about the Nation
Nifty is a combination of 50 stocks and sensex is of 30
Types of Indexes
Price Weighted Index
● Weight Proportional to its stock price
● Not used in INDIA
● Fourth level
● Fifth level
S
Forward Contract
Click to edit Master text styles
Second level
● Third level
● Fourth level
● Fifth level
Characteristics
● Fourth level
● Fifth level
Futures v/s Forwards
Future Terminology
Spot Price
Future Price
Contract cycle
Expiry date
Contract size
Initial margin
Marking to market
Maintenance of margin
Future Payoffs (Profit)
Long Futures
Future Payoffs (Profit)
Short Futures
Application of Futures
● Fourth level
● Fifth level
Similar to Phone
SWAP
Especially for
Banks
Not Followed in
India
THANK YOU
FOR MORE INFO
www.jaiganeshca.blogspot.com