A financial instrument whose value is derived from the value of another asset, such as a currency. For this reason, forex derivatives are widely used because they allow traders to combine the values of two or more currencies and trade stocks based on that combination.
Position: The net amount of a currency pair provides exposure to fluctuations in the exchange rate of that currency pair. Forex traders take positions to speculate on the movement of the exchange rate.

In the realm of forex (foreign exchange), a derivative is a financial instrument whose value is derived from the underlying currency pair. Essentially, it is a contract between two parties that derives its price from the fluctuations in exchange rates. The most common types of forex derivatives include futures and options.

Futures contracts obligate the buyer to purchase, or the seller to sell, a specified amount of a currency at a predetermined future date and price. This provides a level of certainty for both parties involved in the transaction, allowing them to hedge against potential adverse movements in exchange rates.

Options, on the other hand, provide the holder with the right but not the obligation to buy or sell a currency pair at a predetermined price before or at the expiration date. Forex derivatives are widely used by investors and businesses to manage risk, speculate on currency movements, and optimize portfolio performance. However, it's crucial to note that while derivatives offer opportunities for profit, they also involve a level of risk, and individuals should have a solid understanding of the forex market and derivative instruments before engaging in such transactions.