What are the types of derivatives? Back to list

Member SinceNov 21, 2022

Posts 25

Olinger

Jan 24, 2023 a 07:18
Derivatives are financial instruments that derive their value from an underlying asset, such as a stock, commodity, currency, or interest rate. There are several types of derivatives, each with its own characteristics and uses. The most common types of derivatives are forwards, futures, options, and swaps. A forward contract is a customized agreement between two parties to buy or sell an underlying asset at a specified price and date in the future. A futures contract is similar to a forward contract, but it is traded on an exchange and is standardized. An option is a contract that gives the holder the right to buy or sell an underlying asset at a specified price and date. A swap is an agreement between two parties to exchange cash flows based on a specified underlying asset or index.

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