Derivatives का Basic Concept सरल भाषा में |
Learn2Trade Series: Episode 8
In the eighth episode of the Learn2Trade series, Mr. Vivek Bajaj will provide insights into the fundamentals of derivatives and the advantages and risks implied while trading in futures. He will explain the starting points of derivative contracts and the different types of financial derivatives. Trading in the cash market is excellent for advancing as a novice and is easy to enter with less capital. Nonetheless, it doesn't help in creating colossal cash. This is where the concept of the derivative market comes into the picture. Derivatives are like financial tools crafted from real-world assets, giving traders a chance to protect themselves or take a guess on where the asset's price might go next. He will introduce futures, commodities, and currency and explain the concepts of hedging, leverage, and margin trading.
Watch the video to comprehend how you might bring in enormous cash with less capital.
What You Will Learn
Trading is an exciting experience, to excel in trading, one needs to continuously upgrade their skillset and stay updated with the latest market trends, says Mr. Bajaj. One such essential concept he discusses in this episode is the concept of derivatives. The idea of derivatives originated from the concept of hedging, which was introduced to reduce the risks faced by farmers. This mechanism laid the foundation for the first derivative contract, called futures. In this contract, both parties agree to buy/sell an asset at a predetermined price on a specified future date.
Vivek Bajaj explains that Futures and forwards are similar yet distinct contracts. While forwards allow parties to fix the price on any day, futures have a pre-decided delivery date and quoted price set by the exchange. But when derivatives came into play, they tackled issues like unpredictable price swings and defaults by setting up margin money. This margin acts as a security deposit, ensuring that both parties meet their contractual obligations.
Explaining about marginal funding, Vivek Bajaj says when trading in the stock market, just sticking to buying and selling shares for delivery might not always bring in profits. He explains, that intraday trading allows for quick buying and selling, but significant profits often require holding onto stocks for a longer duration, known as swing trading. You will find out that derivatives give traders a bit of a financial boost, letting them take on bigger positions with a limited amount of money. They enable traders to enter the derivative market with a more substantial position, aiming for bigger returns.
He explains futures, commodities, and currency derivatives which offer scope for diversification and the potential for significant gains. But with this potential for reward comes increased risk. Price risk and credit risk are the two primary risks associated with derivatives. While price risk pertains to the fluctuation in the future price of the asset, credit risk deals with the risk of default by the counterparty. To manage these risks, traders need to be watchful and informed, understanding the market dynamics and adjusting their strategies accordingly is very essential.
Throughout this episode, he provides valuable insights, tips, and strategies to help you navigate the derivative market confidently. Whether you're looking to hedge your portfolio, capitalize on market trends, or simply expand your trading horizons, understanding the concept of derivative trading is essentials
About Mr. Vivek Bajaj
The passion for data, analytics and technology is what makes Vivek Bajaj a financial market survivor. The journey as a market participant started in 2002 when the first trade was executed in the options contract of ITC. Life was simpler and easier during that time. Since then technology and Big data have taken over totally. As an early adapter to the complex tools, Kredent was formed to capitalise on the opportunities. He is co-founder of StockEdge and is committed to bring simplicity in the complex world of market data. He is a Chartered Accountant, Company Secretary and an MBA from IIM Indore. He is a part of various committees of exchanges and regulator and he has been an active contributor in the evolution of Indian Derivatives Market.
Learn2Trade Series: Episode 8
In the eighth episode of the Learn2Trade series, Mr. Vivek Bajaj will provide insights into the fundamentals of derivatives and the advantages and risks implied while trading in futures. He will explain the starting points of derivative contracts and the different types of financial derivatives. Trading in the cash market is excellent for advancing as a novice and is easy to enter with less capital. Nonetheless, it doesn't help in creating colossal cash. This is where the concept of the derivative market comes into the picture. Derivatives are like financial tools crafted from real-world assets, giving traders a chance to protect themselves or take a guess on where the asset's price might go next. He will introduce futures, commodities, and currency and explain the concepts of hedging, leverage, and margin trading.
Watch the video to comprehend how you might bring in enormous cash with less capital.
What You Will Learn
Trading is an exciting experience, to excel in trading, one needs to continuously upgrade their skillset and stay updated with the latest market trends, says Mr. Bajaj. One such essential concept he discusses in this episode is the concept of derivatives. The idea of derivatives originated from the concept of hedging, which was introduced to reduce the risks faced by farmers. This mechanism laid the foundation for the first derivative contract, called futures. In this contract, both parties agree to buy/sell an asset at a predetermined price on a specified future date.
Vivek Bajaj explains that Futures and forwards are similar yet distinct contracts. While forwards allow parties to fix the price on any day, futures have a pre-decided delivery date and quoted price set by the exchange. But when derivatives came into play, they tackled issues like unpredictable price swings and defaults by setting up margin money. This margin acts as a security deposit, ensuring that both parties meet their contractual obligations.
Explaining about marginal funding, Vivek Bajaj says when trading in the stock market, just sticking to buying and selling shares for delivery might not always bring in profits. He explains, that intraday trading allows for quick buying and selling, but significant profits often require holding onto stocks for a longer duration, known as swing trading. You will find out that derivatives give traders a bit of a financial boost, letting them take on bigger positions with a limited amount of money. They enable traders to enter the derivative market with a more substantial position, aiming for bigger returns.
He explains futures, commodities, and currency derivatives which offer scope for diversification and the potential for significant gains. But with this potential for reward comes increased risk. Price risk and credit risk are the two primary risks associated with derivatives. While price risk pertains to the fluctuation in the future price of the asset, credit risk deals with the risk of default by the counterparty. To manage these risks, traders need to be watchful and informed, understanding the market dynamics and adjusting their strategies accordingly is very essential.
Throughout this episode, he provides valuable insights, tips, and strategies to help you navigate the derivative market confidently. Whether you're looking to hedge your portfolio, capitalize on market trends, or simply expand your trading horizons, understanding the concept of derivative trading is essentials
About Mr. Vivek Bajaj
The passion for data, analytics and technology is what makes Vivek Bajaj a financial market survivor. The journey as a market participant started in 2002 when the first trade was executed in the options contract of ITC. Life was simpler and easier during that time. Since then technology and Big data have taken over totally. As an early adapter to the complex tools, Kredent was formed to capitalise on the opportunities. He is co-founder of StockEdge and is committed to bring simplicity in the complex world of market data. He is a Chartered Accountant, Company Secretary and an MBA from IIM Indore. He is a part of various committees of exchanges and regulator and he has been an active contributor in the evolution of Indian Derivatives Market.
Other series by Elearnmarkets
Through this series, watch Vivek Bajaj simplify investing and key components required to build a habit of investing and unleash the power of compounding.
All Episodes
- Episode 1 Stock Market में Trading की शुरुआत कैसे करे ?
- Episode 2 Share Market में Trends और Charts कैसे बनाते है?
- Episode 3 Trading Terminal क्या है और उसका प्रयोग कैसे करे ?
- Episode 4 4000+ Stocks में से कौनसे Stocks Select की जाये?
- Episode 5 आसान तरीके से Charts Track करे | TradingView का पूर्ण प्रयोग सीखे |
- Episode 6 Share Market में High Momentum Stocks कैसे निकाले?
- Episode 7 Sector की तेजी से High Momentum Stocks कैसे निकाले? - Swing Trading Strategy
- Episode 8 Derivatives का Basic Concept सरल भाषा में |
- Episode 9 क्या है Commodities Market और क्यों हमें जानना चाहिए?
- Episode 10 क्या है Commodities Market और इससे पैसे कैसे बनाये ?
- Episode 11 क्या है Currency Market और कैसे Trade करे?
- Episode 12 क्या है Moving Average का महत्त्व Share Market में Trading के लिए?
- Episode 13 केसे समझे Stock Operator क्या कर रहा है?
- Episode 14 Open Interest से Stock Operator के Position को कैसे समझे ?
- Episode 15 Stock से सही Time पे कैसे निकलें ?
- Episode 16 Fibonacci Retracement से Stock Trading कैसे करें ?
- Episode 17 Stock Trading में कितना Capital और कितना Stop Loss होना चाहिए?
- Episode 18 Candlestick Patterns क्या है और इससे Trading कैसे करें?
- Episode 19 Relative Strength से समझें किस Stock में तेज़ी खेलना है।
- Episode 20 किसी भी Stock के Volatility को कैसे समझें?
- Episode 21 Bollinger Bands से Volatile Stocks में Trading कैसे करें?
- Episode 22 Stock से EXIT करने का एक सरल तरीका।
- Episode 23 Stock Trading के लिए Relative Strength Index को कैसे use करें?
- Episode 24 अगर Stock Market में Successful होना है तो ये daily करो।
- Episode 25 Intraday Trade 12 बजे के पहले करो और पैसे बनाओ ।
- Episode 26 इस Trading Strategy से Powerful Stocks में Trade करें ।
- Episode 27 Day Trading के लिए Mother-Daughter Trading Strategy |
- Episode 28 Profitable Stocks में Trade कैसे करें?
- Episode 29 Operator का move समझने के लिए ये Excel रोज बनाओ |
- Episode 30 Excelगिरी करो और Stock Operator का Position समझो।
- Episode 31 Special Gift: Highly Profitable Premium RS Strategy सभी के लीए।
- Episode 32 Trading Strategies की अहम बातें - Stop Loss, Take Profit etc.
- Episode 33 Options Trading का पहला कदम।
- Episode 34 क्या है Option Chain और कैसे Analyse करे? | Options Trading-2
- Episode 35 Options Greeks का सबसे सरल ज्ञान इधर मिलेगा। Options Trading - 3
- Episode 36 Options Trading में Implied Volatility क्या होता है ? | Option Trading - 4
- Episode 37 Options #Strategies कैसे बनाते है? | #Options #Trading - 5
- Episode 38 एक Options Strategy आपके Extra Earnings के लिए। | Options Trading - 6
- Episode 39 Straddle और Strangle Options Strategies से Volatile Market में कैसे Trading करे?
- Episode 40 Technical Analysis Use करके Options में कैसे Trade करे ? | Options Trading - 8
- Episode 41 High-Risk, High-Return Trading Strategy : Pair Trading
- Episode 42 A2Z of Currency Market
- Episode 43 Currency Market का Trading Strategy
- Episode 44 Copper track करो और Equity में Trade करो।
- Episode 45 Zinc Commodity को Study करके Stock Trading करो।
- Episode 46 Nickel Commodity के बारे में पुरा ज्ञान |
- Episode 47 Aluminium और Lead से किस Sector को Impact होता है?
- Episode 48 Mother of all Commodities: Crude Oil के बारे में जरूरी ज्ञान।
- Episode 49 Silver में क्यों और केसे Invest करना चाहिए ?
- Episode 50 Final #Learn2Trade Session to become a Professional Trader !
Other series by Elearnmarkets
Watch Mr. Vivek Bajaj introduce the basic concepts of trading and discuss the various stock market indicators.