Difference between revisions of "Derivatives (finance)"

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(New page: Derivatives are financial instruments based on underlying cash assets. Derivatives can be traded (bought and sold) in a manner similar to stock. Derivatives include futures, options and ...)
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Revision as of 02:59, June 24, 2007

Derivatives are financial instruments based on underlying cash assets. Derivatives can be traded (bought and sold) in a manner similar to stock. Derivatives include futures, options and swaps.

The value and prices of derivatives depends on the fluctuating value of the underlying asset. But as derivatives become more important, their trading can influence the underlying asset pricing.

Derivatives can be traded on a financial exchange, or in an over-the-counter (OTC) market.