Figyan

CA Bigyan Kumar Mishra

is a fellow member of the Institute of Chartered Accountants of India.He writes about personal finance, income tax, goods and services tax (GST), stock market, company law and other topics on finance. Follow him on linkedin or facebook or instagram or twitter.

Understanding Open Interest (OI) in the Derivatives Market

Last reviewed on I By

Open Interest (OI) is a fundamental concept in the derivatives market, reflecting the total number of outstanding contracts that have not yet been settled. By understanding OI, traders can gauge market sentiment and liquidity effectively.What is Open Interest?Open Interest refers to the total number of active contracts (options or futures) that remain unexercised or … [Read more...] about Understanding Open Interest (OI) in the Derivatives Market

European vs. American Options: What is the difference?

Last reviewed on I By

Option is a derivative contract that gives its holder the right to buy or sell the underlying asset at an agreed price and agreed time. We have two different styles of exercising options: American style and European style.Both styles specify when the option contract can be exercised by the buyer and have nothing to do with a geographic region.Options are either calls or … [Read more...] about European vs. American Options: What is the difference?

What is Protective Put and how does this strategy work?

Last reviewed on I By

In hedging, we have a number of strategies to limit the risk of losing profit and to minimize losses. In this article, we have discussed what is a protective put strategy and how they work in the option market.Protective put is a hedging strategy which uses put option contracts to reduce the potential risk of owning a stock. Protective put is used by those traders and … [Read more...] about What is Protective Put and how does this strategy work?

Call Option vs. Put Option: What is the difference?

Last reviewed on I By

Futures and options are two derivatives that traders can buy and sell on a stock exchange. Option is a contract that allows the buyer or holder to have the right, but not the obligation to buy or sell an asset for a predetermined price at a specific date.We have two primary types of options: call options and put options.Both call and put options are traded in stock … [Read more...] about Call Option vs. Put Option: What is the difference?

What is Hedging and how does it work?

Last reviewed on I By

Trading and investing in the financial market involves the risk of loss. But risk can be managed by using hedging techniques based on the type of asset and market conditions.Hedging is a risk management strategy in which you protect your future profit or limit losses of one asset by purchasing or selling another. Most market participants trading in options are using hedging … [Read more...] about What is Hedging and how does it work?