Forward Contract: Utilization, Risks, and Example

Forward Contract: Utilization and Risks A forward contract is a popular trading instrument used in financial markets. It is a type of derivative contract that allows two parties to agree on the future delivery of an asset at a predetermined price. Forward contracts are commonly used to hedge against price …

Derivative Warrants: Types and Example

What are Derivative Warrants? Derivative warrants are financial instruments that give investors the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time period. They are a type of derivative product, which means their value is derived from an underlying …

Cash Equivalents: Types, Features, Examples

Cash Equivalents: Types, Features, Examples Cash equivalents are financial instruments that are highly liquid and have a short-term maturity of usually three months or less. They are considered to be almost as good as cash because of their high liquidity and low risk. Definition and Importance of Cash Equivalents Types …

Binary Option Trading: A Comprehensive Guide with Examples

What is Binary Option Trading? Binary Option Trading is a popular financial instrument that allows traders to speculate on the price movement of various assets, such as stocks, currencies, commodities, and indices. It offers a simple and straightforward way to trade, making it accessible to both novice and experienced traders. …

Asset-Backed Security Types: A Comprehensive Guide

Asset-Backed Security Types: A Comprehensive Guide An asset-backed security (ABS) is a type of financial instrument that is backed by a pool of assets. These assets can include loans, receivables, or other types of financial obligations. ABSs are created by packaging these assets together and issuing securities that represent a …