A derivative is an instrument that derives its value from an underlying asset. The Foreign Exchange Management (Foreign Exchange Derivatives Contracts) Regulations 2000 defines a foreign exchange derivatives contract as a financial transaction or arrangement in whatever form or name, whose value is derived from price movement in one or more underlying assets and includes: i. A transaction which involves [...]
A forward exchange contract is "a commitment to exchange (buy or sell) one foreign currency for another at a specified exchange rate, with the exchange taking place on either a specified future date or during a specified future period". In a forward contract, one party agrees to deliver a specified amount of one currency for another at a specified exchange [...]
A commodity futures is a contractual agreement between two parties to buy or sell a specified quantity and quality of commodity at a certain time in the future at a certain price agreed upon at the time of entering into the contract on the commodity futures exchange. The primary objective for any futures exchange is effective price discovery and efficient [...]