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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.

What is Notional Value? Example & How it's Used Thumbnail

What is Notional Value? Example & How it's Used

Alessandra Nicole

A Beginner's Guide to Trading Derivatives Thumbnail

A Beginner's Guide to Trading Derivatives

SuperMoney Team

Notional Principal Amounts: Definition, Applications, and Practical Illustrations Thumbnail

Notional Principal Amounts: Definition, Applications, and Practical Illustrations

Alessandra Nicole

Futures Contracts: Understanding Delivery Dates and Examples Thumbnail

Futures Contracts: Understanding Delivery Dates and Examples

Silas Bamigbola

Serial Options: Understanding, Utilization, and Examples Thumbnail

Serial Options: Understanding, Utilization, and Examples

Silas Bamigbola

Forward Delivery: Definition, How It Works, and Examples Thumbnail

Forward Delivery: Definition, How It Works, and Examples

SuperMoney Team

Basis Rate Swaps: Understanding the Dynamics, Types, and Practical Applications Thumbnail

Basis Rate Swaps: Understanding the Dynamics, Types, and Practical Applications

Abi Bus

European Options: Definition, Uses, and Real-Life Examples Thumbnail

European Options: Definition, Uses, and Real-Life Examples

Silas Bamigbola

Must Be Filled (MBF) Orders: Definition, Application, and FAQs Thumbnail

Must Be Filled (MBF) Orders: Definition, Application, and FAQs

Abi Bus

Modified Following: Definition, Application, and FAQs Thumbnail

Modified Following: Definition, Application, and FAQs

Abi Bus

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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.