Category: Equity/Futures and Options

Derivatives are considered to be extremely risky. The market is divided in two fronts when it comes to the opinion about risks involved in a derivative contract. Some people are of the opinion that since derivatives are not new securities… Read more

The Need for Derivatives The truth is that derivatives were created out of the need of financial markets. They can and do serve a wide variety of purposes and that is the reason that they exist. Some of the purposes… Read more

Derivatives are used for the following: Hedge or mitigate risk in the underlying, by entering into a derivative contract whose value moves in the opposite direction to their underlying position and cancels part or all of it out Create option… Read more

Some of the common variants of derivative contracts are as follows: Type 1: Forward Contracts Forward contracts are the simplest form of derivatives that are available today. Also, they are the oldest form of derivatives. A forward contract is nothing… Read more

Derivatives are contracts between two parties that specify conditions (especially the dates, resulting values and definitions of the underlying variables, the parties’ contractual obligations, and the notional amount) under which payments are to be made between the parties.The assets include… Read more

Equity Research – a topic on which many people want me to write has no known boundaries! What all should one know for doing Equity research? Well right from Anthropology to Zoology, there is no topic which is not part… Read more

A measure of a company’s financial leverage. Debt/equity ratio is equal to long-term debt divided by common shareholders‘ equity. Typically the data from the prior fiscal year is used in the calculation. Investing in a company with a higher debt/equity… Read more