6. Two derivative products that may be offered through a stock
exchange are an options contract...
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6. Two derivative products that may be offered through a stockexchange are an options contract and a futures contract. Brieflyexplain the main features of each of these products. Why might aninvestor use these products?
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Options Contract This contract gives the buyer of the contract the right not obligation to buysell something security in future at a specified price Features Strike Price The price at which the option owner can buysell the security in future Expiry Date Every option has an expiry date after which option hold no value Flexibility Options in OTC world are highly flexible and can be designed as per the needs of
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