Why Trading In A Derivative Is Important?
Explore the importance of trading in derivatives market and what are some key benefits to it.
Hedging
Hedging is a valuable tool and an advanced investing strategy for investors who want to manage their portfolio risk and protect themselves from potential losses. Derivatives contracts are primarily used to hedge the risk of investing in the underlying asset.
Physical Settlement
According to the latest rules, derivative contracts can be converted to physical settlements. The price of derivatives contracts helps determine the cost of the underlying asset.
Price Discovery
The derivatives market can help predict the future prices of various assets. The price of derivatives contracts helps determine the cost of the underlying asset, creating a more efficient market.



