its value is entirely “derived” from the value coque iphone teddy bear of the underlying asset. The underlying asset can be Securities, Commodities, Bullion, Currency, Livestock or anything else. chaussons pokemon In other words, Derivative means a forward, future, option or any other hybrid contract of pre determined fixed duration, linked for the purpose of contract fulfillment to the value of a specified real or financial asset coque iphone 6 cuir orange or to an index of securities.
With Securities Laws (Second Amendment) Act,1999, Derivatives has been included in the definition of Securities. iphone 11 case The term Derivative has been defined in Securities Contracts (Regulations) Act, as:
a security derived from a debt instrument, share, coque iphone aviation loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;
a contract which derives its value from the prices, or index of prices, of underlying securities.
Futures Contract means a legally binding agreement to buy or sell the underlying security on a future date. Future contracts are the organized/standardized contracts in terms of quantity, quality (in case of commodities), delivery time and place for settlement on any date in future. The contract expires on a pre specified date which is called the coque huawei p20 lite bordeaux expiry date of the contract. On expiry, futures can be settled by delivery of the coque iphone 16gb underlying asset or cash. kawaii licorne Cash settlement enables the settlement of obligations arising out of the future/option contract in cash.
Option Contract is a type coque huawei p20 incassable of Derivatives Contract which gives the coque iphone 5s corto maltese buyer/holder of the contract the coque iphone 4s hakuna matata right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The underlying asset could include securities, an index of prices of securities etc.
Under Securities Contracts (Regulations) Act,1956 options on securities has been defined as “option in securities” means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities.
An Option to buy is called Call option and option to sell is called Put option. iphone hoesje Further, if an option that is exercisable on or before the expiry date is called American option coque huawei p20 lite rock and one that is exercisable only on expiry date, is called European option. coque samsung The price at which the option is to be exercised is called Strike price or Exercise price.
Therefore, in the case of American options the buyer has the right to exercise the option at anytime on or before the expiry date. This request for exercise is submitted to the Exchange, which randomly assigns the exercise request to the sellers of the options, who are obligated to settle the terms of the contract within a specified time frame.
As in coque iphone coque huawei p20 lite koala soy luna the case of futures contracts, option contracts can be also be settled by delivery of the underlying asset coque iphone qui se recharge or cash. coque samsung coque iphone However, unlike futures cash settlement in option contract entails paying/receiving the difference between the strike price/exercise price and the price of the underlying asset coque iphone x en or either at the time of expiry of the contract or at the time of exercise / assignment of the option contract. the underlying asset is the index, are known as Index Futures Contracts. coque huawei coque samsung coque iphone x licorne For example, futures contract on NIFTY Index and BSE 30 Index. bague argent These contracts derive their value from the value of the underlying index.
Similarly, the options contracts, which are based on some index, are known as Index options contract. coque samsung coque huawei However, unlike Index Futures, the buyer of Index Option Contracts has only the right but not coque iphone 6 bmw motorsport the obligation to buy / sell the underlying index on expiry. bijoux bracelets coque iphone they can be exercised / assigned only on the expiry date.
An index, in turn derives its value from the prices of securities that constitute the index and is created to represent the sentiments of the market as a whole or of a particular sector of the economy. Indices that represent the whole market are broad based indices and those that represent a particular sector are sectoral indices. coque samsung In the beginning futures and options were permitted only on S Nifty and BSE Sensex. Subsequently, sectoral indices were also permitted for derivatives trading subject to fulfilling the eligibility criteria. coque huawei Derivative contracts may be coque iphone 7 plus chat permitted on an index if 80% of the index constituents are individually eligible for derivatives trading. coque samsung However, no single ineligible stock in the index shall have a weightage of more than 5% in the index. coque iphone The index is required to fulfill the eligibility criteria even after derivatives coque iphone se lama trading on the index has begun. If the index does not fulfill the criteria for 3 consecutive months, then derivative contracts on such index would be discontinued.
By its very nature, index cannot be delivered on maturity of the Index futures or Index option contracts therefore, these contracts are essentially cash settled on Expiry.
What is the structure of deravatives markets in India
Derivative trading in India takes can place either on a separate and independent Derivative Exchange or on a separate segment of an existing Stock Exchange. Derivative Exchange/Segment function as a Self Regulatory Organisation (SRO) and SEBI acts as the oversight regulator. The clearing settlement of all trades on the Derivative Exchange/Segment would have to be through a Clearing Corporation/House, which is independent in governance and membership from the Derivative Exchange/Segment.
What is the regulatory framework coque iphone 5s noir transparente of derivatives markets in India
With the amendment in the definition of ”securities” under coque iphone 4 faconnable orange SC(R)A (to include derivative contracts in the definition of securities), derivatives trading takes place under the provisions of the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992.
Dr. iphone 11 case SEBI has also coque huawei p20 lite rhinoshield framed suggestive bye law for Derivative Exchanges/Segments coque iphone kenzo oeil and their Clearing Corporation/House which lays down the provisions for trading and settlement of derivative contracts. coque iphone The Rules, coque iphone 5s transparente ananas Bye laws Regulations of the Derivative Segment of the Exchanges and their coque huawei p20 girafe Clearing Corporation/House have to be framed in line with the suggestive Bye laws. coque huawei coque iphone SEBI has also laid the eligibility conditions for Derivative coque iphone 5c bierre Exchange/Segment and its Clearing Corporation/House.
