BQLearning - F&O Series: The Long And Short Of Derivatives
BQLearning explains the importance of leverage in a derivatives contract.
BQLearning is a special show that seeks to demystify financial markets, economic theories, legal processes and political structures.
In this series we explain how the most commonly used derivatives - futures and options, work in equity markets, the advantages they offer and the risks associated with them.
In the derivatives market, to buy a contract is to ‘go long’ and to sell a contract is to ‘go short’.
But why use different terms when they mean the same thing? One word- leverage.
This video explains the difference in transactions in a derivatives and cash markets. In the derivatives market, it is not required to pay the entire sum upfront when doing a transaction. In the cash market, the entire sum has to be paid upfront.
The F&O Series
Episode 1: What Is A Forward Contract?
Episode 2: Standardisation Of Contracts And Role Of Exchanges
Episode 3: What Is A Futures Contract?