1.
DERIVATIVES AND TYPES OF
DERIVATIVES
NAME: PRAJWAL MAHESH SONAR
DIV: FINANCE B
ROLL NO: FB357
SUB: COMMODITY MARKET

2.
INTRODUCTION
A derivative is a security with a price that is dependent upon or derived from one
or more underlying assets. The derivative itself is a contract between two or more
parties based upon the asset or assets. Its value is determined by fluctuations in the
underlying asset.

3.
TYPES OF DERIVATIVES :
• Forward
• Future
• Option
• Swaps

4.
FORWARD
A forward contract is a customized derivative contract obligating counterparties to
buy (receive) or sell (deliver) an asset at a specified price on a future date. A
forward contract can be used for hedging or speculation, although its non-standardized
nature makes it particularly useful for hedging.

5.
FUTURE
Futures are a type of derivative contract agreement to buy or sell a specific
commodity asset or security at a set future date for a set price. Futures contracts,
or simply "futures," are traded on futures exchanges like the CME Group and require a
brokerage account that's approved to trade futures.

6.
OPTIONS
In finance, an option is a contract which conveys to its owner, the holder, the right, but
not the obligation, to buy or sell a specific quantity of an underlying asset or instrument
at a specified strike price on or before a specified date, depending on the style of the
option.

7.
SWAP
A swap is a derivative contract through which two parties exchange the cash
flows or liabilities from two different financial instruments. Most swaps involve
cash flows based on a notional principal amount such as a loan or bond, although the
instrument can be almost anything.

8.
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