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

Content Types

Related Topics

Encyclopedia Articles

Discover the definition of financial terms related to derivatives markets.

Micro-Hedging: Definition, Applications, and FAQs

Abi Bus

Double Hedging: Strategy, Mechanics, and Practical Applications

Alessandra Nicole

Perpetual Options (XPO): Definition, Applications, and Pricing

Alessandra Nicole

Hedging Transactions: Definition, How It Works, and Examples

SuperMoney Team

Pay/Collect: Definition, Examples, and Implementation

SuperMoney Team

Super-Hedging: Definition, Strategies, and Practical Applications

Abi Bus

Outperformance Options: Understanding, Applications, and Risks

Abi Bus

The Eurex Exchange: Overview, Functions, and Market Impact

Alessandra Nicole

Reverse Cash-and-Carry Arbitrage: Definition, Mechanics, and FAQs

Abi Bus

Section 1256 Contracts: What It Is, Taxation Insights, and Reporting Guidelines

Alessandra Nicole

Page 14 of 28

Previous 12 13 14 15 16 Next

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.