Welcome to the world of Derivatives trading

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Derivatives trading
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Introduction

• The derivatives market or trading is the
  financial market for derivatives, financial
  instruments like futures contracts or options,
  which are derived from other forms of assets
• Derivatives are financial contracts whose value
  is linked to the value of an underlying asset.
  They are complex financial instruments that are
  used for various purposes, including hedging and
  getting access to additional assets or markets
• Originally, derivatives were used to ensure
  balanced exchange rates for goods traded
  internationally. With the differing values of
  national currencies, international traders needed
  a system to account for differences.

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The market is divided into two parts

• OTC trading
• OTC market manages equities, shares and
  derivatives.
• The exchange begins during the opening times of
  the Trade market, while the exchange essentially
  should be settled, at the end of market hours.
• Exchange markets open at 10 am in the morning and
  shut down at 4 pm.

• Exchange trading
• The SEBI or the Stock Exchange Board of India
  goes about as the guarantor for all exchanges.
• In an OTC, there is no particular certification
  or understanding and the agreements are altered
  according to the prerequisite. Thus, the degree
  of hazard expands complex in an OTC market. where
  monetary forms are exchanged with each other.
• The rising estimation of a US dollar is exchanged
  against the falling estimation of an Euro, and
  the exchange can happen the other way around.

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Participants
Arbitrageurs
Speculators
Hedgers
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Participants in Derivative market

• Hedgers-During the time spent supporting,
  gatherings, for example, people or organizations
  owning or intending to possess something are
  worried that the expense of the item may change
  before either getting it in the money market.
• Speculators- They are actually traders, that help
  to read trading report.
• Arbitragers-They do all the while purchasing and
  selling money related instruments like stocks
  futures in various markets.

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How to do derivative trading?

• If you are entering in derivative trading then
  you have
• Do complete research and make a plan for
  strategy.
• You must have an account for trading.
• Have a DEMAT account.
• Hire a trader.
• Always make sure that doesnt go out of your
  budget.

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Types of Derivative trading
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Futures

• Futures-Futures exchange on trade.
• Traders will utilize a futures contract to fence
  their hazard or guess on the cost of a hidden
  resource.
• The companies engaged with the futures exchange
  are committed to satisfy a promise to purchase or
  sell the hidden resource.

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Forwards

• Forwards-They are like as futures but dont trade
  on exchange. They only trade over the counter.
• At the point when a forward contract is made, the
  purchaser and dealer may have tweaked the terms,
  size and settlement process for the subordinate.
• As OTC items, forward contracts convey a more
  noteworthy level of counterparty chance for the
  two purchasers and merchants.

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Swaps

• Swaps are subordinate contracts that permit the
  trading of money streams between two gatherings.
• The swaps, as a rule, include the trading of a
  fixed income for a drifting income.
• The most mainstream kinds of swaps are loan cost
  swaps, item swaps, and money swaps.

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Options

• Options are like futures.
• Options give the purchaser of the agreements the
  privilege however not the commitment to buy or
  sell the basic resource at a foreordained cost.
• In light of the option sort, the purchaser can
  practice the choice on the development date
  (European options) or on any date before the
  development (American options).

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Why use derivative trading?

• Supporting danger exposure
• Underlying resource value determination
• Market efficiency
• Access to inaccessible resources or markets

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KTG Financial Advisory

• It is an advisory firm which provides services
  for equity management, commodity management,
  currency trading etc..
• Their professional team helps you and advice you
  in planning of your business.
• They provide services according to customer
  requirements and advise to manage their asset.

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Connect with KTG

• You will find the details at https//www.ktginvest
  ment.com/.
• Do connect at- info_at_ktginvestment.com
• call us on 91 6262610192
• Address Plot No 6-7, Pu 4, Scheme No 54,
• Vijay Nagar, Indore - Madhya Pradesh, India
• 452001