πππ¬π’ππ¬ π¨π πππ«π’π―πππ’π―ππ¬ β’ What is a derivative β’ Various derivative products β’ Participants in derivatives market β’ Uses of derivative instruments β’ Beta & hedge ratio β’ Option Greeks Time for a Thread π§΅ Curated in collaboration with @AdityaTodmal

Various products in the derivatives world β’ Forwards β’ Futures β’ Options β’ Swaps β’ Exchange Traded β’ OTC

How derivatives help the participants? β’ Hedgers : To mitigate price risk β’ Corporations: transfer risk to reduce their exposure β’ Traders: willing to take the risk depending on their view β’ Arbitrageurs: Exploit price difference in a product in two different markets

Derivatives market helps in improving in: β’ Price Discovery β’ Transferring risks β’ Hedge exposures

Derivatives derives its value on: β’ Underlying price β’ Volatility of the underlying β’ Riskiness of the underlying β’ Interest rate/cost of funding

The Payout in derivatives is dependent : β’ if the underlying starts to trade above/below a certain price β’ or based on an event eg. corporate bond default

β’ Unsystematic Risk : Diversifiable by taking exposure in different sector β’ Systematic Risk: Market risk, and cant be diversified

Derivatives helps in managing various types of risk: β’ Price Risk β’ Interest Rate Risk β’ Credit Risk

What is Beta? β’Sensitivity of a scrip/portfolio vis-a-vis index movement β’ Beta >1 qualifies for aggressive portfolio & vice-versa

β’ This was an introductory π§΅ on derivatives β’ Ref Source: NISM Equity Derivative module, and other open source over the internet β’ If you β€οΈ this, why not share? β’ Retweet the first tweet and help others find this π§΅ β’ Happy learning π€ to everyone!

β’ I curate threads on trading & financeπππ β’ You can check out other threads π on my profile πβοΈ Follow us: @AdityaTodmal & @niki_poojary for more such interesting π§΅! Have & happy & a safe π· weekend!

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