Derivatives

Definition of Derivatives

Derivative expresses the underlying value of any capital market instruments. In other words, it means a Derivative does not signify any standardized value of any capital market but is a derived value of underlying assets like commodities, securities, bullion, currency, live stock etc.

Further, it can also be a forward, future option or any other hybrid contract having pre-determined fixed duration value, which is to be executed as per the agreements. The Indian Derivative market is regulated as per the "Securities Laws (Second Amendment) Act, 1999".

Derivative Markets in India

• Trading takes place either on a separate and independent Derivative Exchange or on a separate segment of an existing Stock Exchange.
• Derivative Exchange or segment operates as a self regulatory body.
• Securities and Exchange Board of India (SEBI) acts as the guardian.
• Clearing & settlement of all derivative trades made on an Derivative Exchange or Segment are done through a Clearing Corporation - an independent body set to act as a regulatory.

Introduction To Derivatives Types of derivatives Myths and realities about Derivatives

Indian Derivatives Market Participants and Functions in Derivatives

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