Derivatives are financial contracts whose value is linked to an underlying asset, such as stocks, commodities, currencies, or market indices.
A derivative contract derives its value from the price or performance of an underlying asset. Depending on the contract, it may be used to manage risk, gain market exposure, or pursue investment strategies.
Common types include futures, options, forwards, and swaps. Each type has different features, terms, and potential risks.
Derivatives may be used for purposes such as hedging against price movements, managing financial risk, or gaining exposure to an underlying asset without directly owning it.
Derivatives can involve significant risk, including market volatility, leverage-related losses, liquidity risk, and the possibility of losing more than the initial amount invested in certain situations.
9 out of 10 individual F&O traders incur net losses. Derivatives carry high market risk. Read all related documents carefully before trading. (Refer this disclaimer for the section - Why Trade Derivatives on Finkeda Powered by Axis Securities?)