What
is derivative market?
A derivative market is market which
involves a derivative contract were the value of that contract is fully depend
upon the underlying asset.
For Eg : In
IPL ticket the value of the ticket depend upon, till the final match of IPL after that the
value turn to zero.
Let’s take
another example:
PETROL DIESEL
Derivative
product
Derivative product
CRUDE
OIL
Underlying asset
As change in value of crude oil will lead
to change in value of its derivate product i.e petrol & diesel.
Forms
of derivative
Commodity derivative
If
underlying asset are commodity like
crude oil, wheat, gold , silver etc.
Financial derivative
If
underlying asset currency , index, shares etc.
So, we can
conclude that , Value of derivate
product depend upon value of underlying asset.
👍🏻
ReplyDelete