Quick Answer Futures and Options (F&O) trading involves derivative contracts that allow investors to speculate on or…
derivative contracts
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Derivative contracts are financial instruments whose value is derived from the performance of underlying assets such as stocks, bonds, commodities, currencies, interest rates, or market indexes. These contracts include options, futures, forwards, and swaps, and are commonly used for hedging risk, speculation, or arbitrage. Understanding derivative contracts is essential for investors and businesses seeking to manage financial exposure and leverage market opportunities effectively.