Derivatives are financial instruments that act as a contract used to derive the value of an entity. The underlying entity could be an equity or interest rate return. With the help of this financial instrument, one can trade assets which have financial risks. The prices of these derivatives are based upon fluctuations of an asset. Finance students who study the concepts of derivatives often require urgent assignment help to complete their academic projects.
Features of Derivatives
A derivative is one of the major types of financial instruments. Here are some of the features of financial derivatives:
- A derivative can be traded, or exchanges can be conducted over the counter
- The prices of derivate are derived from the fluctuations of an asset
- Derivatives have usually used leverage because of which they have risk-reward factors
Types of traders in a derivative market
A derivative market comprises these types of traders:
- Hedger: A hedger is a participant in the derivative market who either buys or sells the commodities. Hedger faces risk due to price fluctuations of the commodities; they use derivatives to reduce their risk associated.
- Speculator: The firm or individual who accepts the risk associated with the market to achieve profits. They provide depth and liquidity to the derivative market. They purchase assets with the speculation that their value will increase with time.
- Arbitrageur: An Arbitrageur is an opportunist investor who attempts to leverage profits from the efficiencies of the markets. They attempt to gain profits from the miss pricing of the same commodity in different markets; for instance, they would buy the commodity from the market which is low price and sell the same commodity to the market which is higher priced.
Why do students seek urgent assignment help in Australia?
To master the concept of derivatives, students need to study many financial documents and complete many financial projects. These projects take a lot of time to complete when students complete them. The students in Australia who must complete these projects to become certified financial experts look for instant Assignment Help in Australia.
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