Futures Contracts A derivative is a product whose value is derived from the value of one or more basic variables called bases. These underlying assets or reference rates can include Equity, Forex, and Commodity. Futures contracts are a significant type of financial derivative. Definition and Nature A Futures Contract is Read more
A derivative is a product whose value is derived from the value of one or more basic variables called bases. These underlying assets or reference rates can include Equity, Forex, and Commodity. Forward contracts represent the simplest form of financial derivatives. Introduction and Definition A Forward contract is a bilateral Read more
An Option is a financial contract that provides the buyer with a right, but not the obligation, to either buy (call option) or sell (put option) an underlying asset. This right can be exercised at an agreed-upon price, known as the Exercise Price or Strike Price, within a certain period Read more
A derivative is a financial contract that derives its value from an underlying asset. It is a product whose value is to be derived from the value of one or more basic variables called bases. These underlying assets can be stock, currencies, commodities, and more. Derivatives are a mechanism to Read more
Global Depository Receipts (GDRs) are a type of negotiable financial security traded on a local stock exchange that represents a security, usually in the form of equity, issued by a foreign publicly listed company. They are certificates created by an Overseas Depository Bank outside India and issued to non-resident investors Read more
Securitization is a process of converting illiquid assets into marketable securities. It is a method of transforming assets of a lending institution into negotiable instruments for generating funds. In simpler terms, securitization is the means of turning illiquid assets into liquid assets to free up blocked capital. The process involves Read more
Commercial Paper (CP) Definition and Nature Commercial Paper is widely described as an unsecured short-term debt paper or instrument. It is issued in the form of a promissory note or dematerialized form. In India, due to varying state stamp duty structures and the lower duty for Usance Promissory Notes (UPN) Read more
Financial markets are dynamic environments where new instruments are constantly introduced and evolved to meet the diverse needs of investors and businesses. These “new financial instruments” play a significant role in resource mobilization and risk management, reflecting an increasing sophistication in financial transactions driven by factors like globalization and technological Read more
Factoring is fundamentally a financial service involving the conversion of credit bills into cash. It refers to the outright sale of accounts receivable to a factor or a financial agency. A factor is a firm that acquires the receivables of other firms, acting as a financial intermediary. This service is Read more
Mutual Funds are a significant part of the financial services sector, particularly in India, offering a way for individuals to invest in capital markets. A mutual fund is structured as a trust that pools the savings of many investors who share a common financial goal. The money collected is then Read more