Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Which is the world's favorite financials derivative?

user-image
Question added by Abdul Ahad Khatri , SENIOR MANAGER FINANCE , UNIVERSAL NETWORK SYSTEMS LIMITED
Date Posted: 2013/07/31
SHEMEEM S
by SHEMEEM S , FINANCIAL ANALYST , INDIAN OVERSEAS BANK

Most traded Derivatives are

1. Futures

2. Forwards

3. Options

4. Interest Rate Swaps

5. Currency Swaps

6. Credit Default Swaps

7. Swaptions, etc.

When it comes to Indices, in terms of turnover, you will find options in the front row. In currency space, Swaps are widely used as a hedging tool all over the world.

In commodity space, futures stand first

Interest rate swaps are widely used to hedge interest rate risk and is a powerful tool in fixed income space

In developed markets,. CDS made a new vibration recently. 

So, the importance of derivative change from uderlying to underlying.. 

 

Muhammad Afaq
by Muhammad Afaq , SENIOR FINANCIAL ACCOUNTANT , United Eddy Company (United Yousef M. Naghi Group)

There is no hard and fast rule to determine the which derivative is best one.
It depends upon the managers ability, selection of stocks, and timing means when to entered the market.Today different financial derivatives are used over the world from different fund managers.Financial derivatives are of following types.
Options: Put Option and Call Option Forward contract Future Contract Beside these we use the below mentioned in Money market for trading purposes.
Currency Swap rate and interest rate swap

Deleted user
by Deleted user

Wow! What a good question.
IMO, it simply has to be Options (in terms of number of people using it) .
The reason it is popular is the simplicity in understanding and accessibility.
Hence, options have to be the most favorite among derivatives.
Though, if you look in terms of the turnover basis, it would be exotic options particularly in the fixed income and FX options.
Hope this helps, Thanks,

Shahmeen Ashraf
by Shahmeen Ashraf , Managing Consultant SAP FI and REFX Consultant , Telemarks Consulting TMC

Growth rate and liquidity are the most important for investors, stakeholders, government and general public.

Idrees Zafar
by Idrees Zafar , Senior Financial Analyst , Bayt.com

Looking at bid-ask spreads in major stock exchanges, forwards, swaps and options have the lowest spreads of all derivative types of contracts In these contracts, interest rate derivatives are the most traded in over-the-counter markets.

Mohammed Salim Allana
by Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

First of all it is not easy to understand Financial derivative products and its various components.

Those investing in derivative products should have extensive knowledge of market sensitivities and volatility. With regard to popularity, its different product in different markets. However Options and currency/Interest rate swaps are the most popular ones

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

Currency Trading

Aziz ur Rehman ur Rehman
by Aziz ur Rehman ur Rehman , Assistant Manager Finance , Central Power Puchasing Agency (CPPA)

hummmmmmmmmmmmmm Credit Cards

More Questions Like This