Anand Rathi Global Finance Derivative Analyst Interview Questions, Process, and Tips

A call option is a financial contract that gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time period.

• Call options are commonly used in stock trading and can be bought or sold on various financial markets.

• The specified price at which the asset can be bought is known as the strike price.

• The specific time period during which the option can be exercised is known ...read more

Primary market is where securities are created and sold for the first time, directly from the issuer to the investor.

• Securities are issued by companies or governments to raise capital.

• Investors purchase securities directly from the issuer in the primary market.

• Examples include initial public offerings (IPOs) and bond issuances.

Expiry dates in markets refer to the date on which a derivative contract expires.

• Expiry dates determine when the contract ceases to exist and the parties involved must fulfill their obligations.

• They are important for traders to plan their positions and manage risk.

• Different markets have different expiry dates for their derivative contracts, such as monthly, quarterly, or annually.

• For example, in the futures market, con...read more

Forwards are customized contracts traded over-the-counter, while futures are standardized contracts traded on exchanges.

• Forwards are customizable in terms of contract size, expiration date, and delivery terms, while futures have standardized contract specifications.

• Forwards are traded over-the-counter (OTC) directly between two parties, while futures are traded on exchanges with a clearinghouse acting as a counterparty...read more