Glossary
/Derivative
What is a Derivative?
You aren’t buying the actual stock here. Instead, you are betting on the price movement of that stock through a side contract. Its value is completely "derived" from the underlying asset, hence the name. Futures and Options are the two main types you will find in the Indian market. Big institutions use them to hedge their risks, but retail traders mostly use them to make highly leveraged, short-term bets. It is incredibly risky if you don't know what you're doing, as you can lose more money than you initially put in.
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