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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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IDEM Exchange: What It Is, How It Works, and Market Dynamics Thumbnail

IDEM Exchange: What It Is, How It Works, and Market Dynamics

SuperMoney Team

Chameleon Options: Definition, Strategies, and Real-world Applications Thumbnail

Chameleon Options: Definition, Strategies, and Real-world Applications

SuperMoney Team

Clearing Corporations: Definition, How It Works, and Examples Thumbnail

Clearing Corporations: Definition, How It Works, and Examples

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Call on a Call: Definition, How It Works & Examples Thumbnail

Call on a Call: Definition, How It Works & Examples

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.