Derivatives:

Derivative contracts, commonly known as Derivatives are tradable instruments which derive its value from an underlying asset or assets such as commodities, equities, equity indices etc. There are a variety of derivative products like swap, forward, futures, options etc. The latter two are widely applied in the equity market allover the world and have already been introduced in the Indian equity market too. This column deals with the salient features of futures and options since they are very much advantageous to equity investors.