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Tool of Derivative contract

Basic Tools of contract.


Tool of Derivative contract,
The prices of both spot and F&O markets are published by many major business dailies  such as Economic Times, Mint, Business Standard, Financial Express, etc. They publish all  or some of the following details for the derivatives contracts being traded on the  exchanges.

Date: This gives the Trade date.  

Symbol: This gives the underlying index or stock e.g. NIFTY .

Basic tools used in contract
Tool of Derivative contract

Instrument: This gives the contract descriptor for the various instruments available in  the derivatives segment e.g. FUTSTK, OPTIDX, etc. 

Expiry date: The date on which the contract expires 

Option Type: This gives the type of option for the contract. (CE‐ Call European, PE‐ Put  European, CA‐ Call American, PA‐ Put American)  

Corporate Action level: This is the Corporate Action Flag. This flag changes when there is  a corporate action on a contract, which could either be a symbol change or a dividend  announced by the company.  

Strike Price: This gives the Strike Price of the contract. 

Opening price: This gives the price at which the contract opened for the day. 

High price: This gives the highest price at which the contract was traded during the day.  

Low price: This gives the lowest price at which the contract was traded during the day.  

Closing price: This gives the price of the contract at the end of the day.  

Last traded price: This gives the price at which the last contract of the day was traded.  

Open Interest: For futures contracts open interest is equivalent to the open positions in  that futures contract multiplied by its last available closing price. For option contracts,  open interest is equivalent to the open positions multiplied by the notional value.  Notional value with respect to an option contract is computed as the product of the  open position in that option contract multiplied by the last available closing price of the  underlying.  

Total Traded Quantity: This is the total no. of contracts on which business took place  during the day. 

Total Traded Value: The total money value of the business which took place on the  contract during the day. 

Number of Trades: The total no. of trades which took place on the instrument during the  day. 
Positive trend: It gives information about the top gainers in the futures market.

Negative trend: It gives information about the top losers in the futures market.  

Futures OI gainers: It lists those futures whose % increase in Open Interest is  among the highest on that day.  

Futures OI losers: It lists those futures whose % decrease in Open Interest is  among the highest on that day.  

Basic tools used in derivative contract.
Tool of Derivative contract

Active Calls: Calls with high trading volumes on that particular day. 

Active Puts: Puts with high trading volumes on that particular day. 

Put/ Call ratio (PCR): It gives the information about the ratio of trading volume of  put options to call options. The ratio is calculated either on the basis of options  trading volumes or on the basis of their open interest.



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The analogy I have used might not be 100% correct but it’s easy to understand things with a simpler analogy.


That’s it for this post. Do check out my other posts to gain more knowledge about finance.

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