DERIVATIVES

DERIVATIVES

•  derivatives are financial contracts set between two or more parties, that derive their value from an underlying asset, group of assets, or bench mark.
• a derivative can trade on exchange or over the counter.
•  prices are usually leveraged from fluctuations in the underlying assets.
•  derivatives are usually leveraged instruments, which increases their potential risks and rewards.
• common derivatives include future contracts , forwards , options and swaps.