Written by Upstox Desk
5 min read | Updated on July 31, 2025, 18:25 IST
What is a derivative?
Derivative trading
Broad classification of derivatives on the basis of where they are traded
Exchange Traded Derivatives in India
Types of Derivative Contracts traded on Exchanges in India
Types of Exchange-traded derivatives based on Underlying
Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.
A derivative is something which is based on another source.
Let's take paneer for instance. The price of paneer is dependent on the price of milk. It can be said that paneer is a derivative of milk (source).
The source, which is milk in this case, is referred to as the underlying. Any movement in the price of milk will be reflected in the price of the corresponding derivative which in this case is paneer.
Derivatives trading refers to the buying and selling of derivative contracts. Derivative contracts are essentially time-bound financial instruments with a fixed expiry date.
In the Indian stock market, there is an entire segment where derivatives are traded, it is known as the F&O (Futures and Options) segment. Trading volumes in derivatives contracts are significant, making them popular instruments among market participants. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the most popular stock exchanges in India.
About Author
Upstox Desk
Upstox Desk
Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.
Read more from Upstox