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Derivatives Markets

A derivative is a type of investment that depends on the value of something else, like a stock or an index. It's not worth anything on its own but instead gets its value from the thing it's linked to. Continue Reading Below

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Encyclopedia Articles

Discover the definition of financial terms related to derivatives markets.

Options Contract Explained: How It Works, Types, and Examples Thumbnail

Options Contract Explained: How It Works, Types, and Examples

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Black-Scholes Model: Definition, How It Works, and Examples Thumbnail

Black-Scholes Model: Definition, How It Works, and Examples

SuperMoney Team

Delta Hedging: Definition, How it Works, and Examples Thumbnail

Delta Hedging: Definition, How it Works, and Examples

SuperMoney Team

Swap: What It Is, How to Calculate, and Types Thumbnail

Swap: What It Is, How to Calculate, and Types

Silas Bamigbola

Credit Default Swap: Definition, How It Works, Types, and Examples Thumbnail

Credit Default Swap: Definition, How It Works, Types, and Examples

Silas Bamigbola

Roll Options Forward: Definition, How It Works, Types, and Examples Thumbnail

Roll Options Forward: Definition, How It Works, Types, and Examples

SuperMoney Team

Zero-Coupon Swaps: Definition, Valuation, Risks, and Applications Thumbnail

Zero-Coupon Swaps: Definition, Valuation, Risks, and Applications

Abi Bus

Zero-Coupon Inflation Swaps (ZCIS): Definition, Applications, and Case Studies Thumbnail

Zero-Coupon Inflation Swaps (ZCIS): Definition, Applications, and Case Studies

Silas Bamigbola

Time Decay: How It Works, Impact, and Examples Thumbnail

Time Decay: How It Works, Impact, and Examples

Silas Bamigbola

Rate Anticipation Swap: Purpose and Benefits Thumbnail

Rate Anticipation Swap: Purpose and Benefits

SuperMoney Team

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About Derivatives Markets

A derivative is a type of investment that depends on the value of something else, like a stock or an index. It's not worth anything on its own but instead gets its value from the thing it's linked to. Derivatives include futures and options contracts, which are agreements to buy or sell a stock, commodity, or other asset at a certain price in the future. These types of investments are traded in the derivatives market.
Futures markets are places where people trade futures contracts. Futures contracts are standardized and regulated, and trades are settled and confirmed through a clearinghouse. Options markets are similar and trade options contracts, which give the buyer the right, but not the obligation, to buy or sell an asset at a certain price. Futures and options markets trade contracts for different types of assets, like stocks, bonds, commodities, and so on.