Payoff profile for Forwards

2 mins read Definition A payoff profile shows the scenarios under which a trade will make money and the scenarios under which it

Master Class: Options and derivatives crash course: Session One: Terminology

2 mins read A derivative instrument is very similar to bottled water in the Gobi Desert. Its value is determined completely by external variables. The external factor could be anything but in general is either a financial asset or an economic variable (such as interest rates). The external factor or variable is called the underlying.