This topic contains 323 replies, has 322 voices, and was last updated by  Divya E R 8 months, 1 week ago.

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  • #5230

    What is the role of exchange in derivative instruments?

     Abirami Duraisamy 
    Rank: Level 5

    In futures, exchange will get the refundable margin from buyer and seller. The contract will be traded between buyer and seller on the strike price for the stocks. Once the contract is agreed, exchange will take care of mark to market on daily basis until the end of the contract.

    In options, exchange will execute the trading of the premium between buyer and seller and once agreed, exchange will take care of daily leveling, but the buyer of the contract do not have any obligations.

     R.Durga Prasad 
    Rank: Level 4

    The exchange plays a major role in derivative instruments like futures and options.

    In futures exchange will maintain refundable margin from both the parties ,and manages the trade.

    In options it deals with the premium for the deal and executes it.

     Padmavathi Sukumar 
    Rank: Level 3

    Exchange plays the role of mediator in derivative instruments. In Futures the exchange collects the margin from both the buyer and seller, does the mark to market and on the expiry date makes the settlement for the deal happen. In options exchange settles the premium deal between the buyer and seller, does the mark to market on a daily basis and takes care of the final settlement

    Rank: Level 7

    The exchange creates the futures and the options instruments available for the traders with various expiry dates. It guides and protects the buyers and sellers with certain rules and regulations.

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