Derivatives are contracts which derives its value from some underlying assets which can be commodities, currencies, interest rate, stock indices etc. All these underlying assets prices keeps on changing, therefore derivatives does not have its direct value and their value depends upon the future price movements of the underlying assets. To trade in futures contracts traders can use their existing Demat account and trading account or open them with registered broker if they do not have. Four major entities of derivatives market are discussed below : 1) Trading members They can trade using their own account for self or on their clients behalf. All these trades are finally settled by the clearing members. 2) Trading cum clearing members They can trade and settle their own trades and of other trading members as well. 3) Professional clearing members They are not a trading members. Usually professional clearing members are banks who settles ...
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