Financial derivatives are contracts between two parties based on an underlying asset, such as an interest rate, stock valuation or a commodity price.

Derivatives are used for hedging, speculation, or to increase exposure.

The simplest type of financial derivative is a futures contract, which is a contract between two parties to buy or sell a specified asset at a predetermined price on a specified date.

Options are another type of financial derivative, which gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price on a specified date.

Swaps are another type of financial derivative, which are agreements between two parties to exchange a series of cash flows over a specified period of time.

Soundtrack: 'Cosmic Bloom',. Available under creative commons non-commercial, no derivatives license (c) Ketsa [ Ссылка ]

This is not investment advice. Lucidate is not an investment advisor. Futures prices can rise and fall. Always consult with a regulated financial adviser before making investment decisions.

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