Your comprehensive hub for derivative instruments and trading. Browse articles, guides, and glossaries on futures, options, forwards, swaps, pricing models, Greeks, and strategies for hedging and speculation.
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Videos
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13 mins
What Are the Different Types of Futures Contracts?
Futures contracts can be classified according to their underlying assets, including commodities, currencies, individual stocks, market indices, and interest rates. This article explains the different types of futures contracts, how they work, who uses them, their practical applications, settlement methods, and key differences.
Derivatives
Futures
12 mins
Risk Management in Options Trading: Strategies to Protect Your Capital
Risk management in options trading helps limit losses using position sizing, stop-loss, hedging, and understanding Greeks, ensuring traders protect capital and remain consistent over the long run.
Options
Trading
+ 2
8 mins
Understanding the Different Types of Derivatives in Trading
Derivatives are financial contracts derived from underlying assets, designed to manage price uncertainty. They allow participants to hedge risks, speculate on future price movements, and aid in price discovery. While powerful, they require proper understanding and risk management to be used effectively.
Financial Instruments
Derivatives
At The Money Options (ATM)
At the money, the strike price of the underlying stock is equal to or very close to the option’s strike price. At the money option, contracts have no intrinsic value but only time value. At the money, the option can quickly move into profit or loss with small price changes.
Options
Trading
+ 1
Backwardation
Backwardation is a market condition where the spot price of the underlying asset is higher than its futures price. It typically occurs when there is greater demand for the asset in the present compared to contracts expiring in the future.
Trading
Derivatives
Bear Call Spread
A Bear Call Spread, also known as a Short Call Spread or Call Credit Spread, is an options strategy that profits when the underlying asset's price declines or remains below the short call's strike price.
Trading
Trading Strategies
+ 2
Bull Calendar Spread
A bull calendar spread is an options trading strategy that involves buying and selling call options with the same strike price but different expiration dates, where the longer-dated option is purchased, and the shorter-dated option is sold.
Trading
Trading Strategies
+ 2