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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.

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Swap Curve: Understanding, Examples, and Market Impact

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Equity Derivatives: Understanding, Applications, and Risk Management Strategies

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The New York Mercantile Exchange (NYMEX): Insights into Its Evolution, Commodities, and Trading Impact Thumbnail

The New York Mercantile Exchange (NYMEX): Insights into Its Evolution, Commodities, and Trading Impact

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Potential of Technological Integration in ISDA Master Agreements Thumbnail

Potential of Technological Integration in ISDA Master Agreements

Silas Bamigbola

Interest Rate Derivatives: Types, Strategies, and Real-world Examples Thumbnail

Interest Rate Derivatives: Types, Strategies, and Real-world Examples

Silas Bamigbola

Rho: Definition, Examples, and Strategic Insights Thumbnail

Rho: Definition, Examples, and Strategic Insights

Silas Bamigbola

Understanding Portfolio Margin: How It Works, Types, and Examples Thumbnail

Understanding Portfolio Margin: How It Works, Types, and Examples

Abi Bus

CDX Index: Definition, Benefits, and Applications Thumbnail

CDX Index: Definition, Benefits, and Applications

SuperMoney Team

Futures Options: Definition, Examples, and Strategies Thumbnail

Futures Options: Definition, Examples, and Strategies

SuperMoney Team

Cash Settlement: What It Is, How It Works, and Real-Life Examples Thumbnail

Cash Settlement: What It Is, How It Works, and Real-Life Examples

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.