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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.

Currency Binary Options: Definition, How They Work, Examples, and Risks Thumbnail

Currency Binary Options: Definition, How They Work, Examples, and Risks

Dan Agbo

Forward Commitment: Definition, Uses, and Implications Thumbnail

Forward Commitment: Definition, Uses, and Implications

Dan Agbo

Reference Obligation: Definition, Functioning, and Importance Thumbnail

Reference Obligation: Definition, Functioning, and Importance

Dan Agbo

Liability Swaps: Definition, Benefits, and Risks Thumbnail

Liability Swaps: Definition, Benefits, and Risks

Dan Agbo

Risk-Based Haircuts: Definition, Examples, and Calculations Thumbnail

Risk-Based Haircuts: Definition, Examples, and Calculations

SuperMoney Team

FINEX: Understanding Its Evolution, Impact, and Contemporary Relevance Thumbnail

FINEX: Understanding Its Evolution, Impact, and Contemporary Relevance

SuperMoney Team

Average Price Calls: Understanding, Application, and Real-Life Scenarios Thumbnail

Average Price Calls: Understanding, Application, and Real-Life Scenarios

SuperMoney Team

Double Barrier Options: Explained, Types, and Real-Life Examples Thumbnail

Double Barrier Options: Explained, Types, and Real-Life Examples

SuperMoney Team

STRIPE: Understanding, Examples, and Benefits Thumbnail

STRIPE: Understanding, Examples, and Benefits

SuperMoney Team

Path Dependent Options: Understanding, Examples, and Strategies Thumbnail

Path Dependent Options: Understanding, Examples, and Strategies

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.