The video describes the concept of derivatives in simple to understand manner. Meaning of derivatives and their uses are explained along with examples. The video also explains the underlying assets in detail.
Derivatives are basically complex financial instruments whose value is based on the value of the underlying asset. The underlying asset may be a commodity, currency, shares, bonds, gold or any other asset. Derivative contracts are related to some future time period. The time period may be short or long. A derivative contract may be exchange traded or over the counter. Over the counter contract refers to a derivative contract between parties directly without any intermediary or exchange in between. On the contrary, exchange traded contract refers to a derivative contract in which exchange acts as an intermediary between the parties. Exchange traded contracts are more secure than the over-the-counter contracts.
Derivatives can be of various types. Popular types include forwards, futures, options & swaps. Derivatives are widely used because of its useful applications. They are used for hedging, speculation, arbitrage to name a few.
The next video will explain the types of derivative instruments – Futures, Forwards, Options and Swaps. The viewers can post any topic related to commerce and management which they want us to make video on.
The video is prepared by Dr.Shuchi. She has an experience of over 19 years. She is a merit holder through out and holds specialised degree in finance. She has numerous national and international research publications in reputed journals. She is an enthusiast teacher whose passion is to present the complex topics in the most simplified manner. You can reach her at simplifyconcepts@gmal.com.