derivaties

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Ravikishore

Ravikishore (Querist)
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01 November 2008 what is meant by Derivaties and what is the difference between derivaties and equity
thanks in advance

CMA Jitendra Singh

CMA Jitendra Singh (Expert)
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03 November 2008 Derivatives are one type of securities whose price is derived from the underlying assets. And value of these derivatives is determined by the fluctuations in the underlying assets. These underlying assets are most commonly stocks, bonds, currencies, interest rates, commodities and market indices. As Derivatives are merely contracts between two or more parties, anything like weather data or amount of rain can be used as underlying assets. The Derivatives can be classified as Future Contracts, Forward Contracts, Options, Swaps and Credit Derivatives.

Hope by meaning of derivative ,you will be able to differentiate between derivative and equity.