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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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Discover the definition of financial terms related to derivatives markets.

Single Stock Futures: Definition, Strategies, and Real-World Scenarios Thumbnail

Single Stock Futures: Definition, Strategies, and Real-World Scenarios

Silas Bamigbola

Options Trading Roll Backs: Demystifying the Strategy with Examples and Analysis Thumbnail

Options Trading Roll Backs: Demystifying the Strategy with Examples and Analysis

Alessandra Nicole

Asset Swaps: Functionality, Applications, and Real-world Scenarios Thumbnail

Asset Swaps: Functionality, Applications, and Real-world Scenarios

Alessandra Nicole

Volatility Swaps: Understanding, Applications, and Real-World Scenarios Thumbnail

Volatility Swaps: Understanding, Applications, and Real-World Scenarios

Alessandra Nicole

Omega in Options Trading: Definition, Calculation, and Practical Applications Thumbnail

Omega in Options Trading: Definition, Calculation, and Practical Applications

Abi Bus

Exploring Synthetic ETFs: What They Are, How They Work, and Pros & Cons Thumbnail

Exploring Synthetic ETFs: What They Are, How They Work, and Pros & Cons

Alessandra Nicole

Options Trading Strategies: Put Ratio Backspread Explained and Applied Thumbnail

Options Trading Strategies: Put Ratio Backspread Explained and Applied

Abi Bus

Cross Margining: Strategies, Impact, and Real-world Cases Thumbnail

Cross Margining: Strategies, Impact, and Real-world Cases

Silas Bamigbola

Compound Options: Definition, Applications, and Real-world Scenarios Thumbnail

Compound Options: Definition, Applications, and Real-world Scenarios

Silas Bamigbola

Short Hedges: Strategies, Examples, and Industry Applications Thumbnail

Short Hedges: Strategies, Examples, and Industry Applications

Silas Bamigbola

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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.