Financial Education

Derivative

Contract whose value derives from an underlying (stocks, rates, commodities)

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Derivative

Contract whose value derives from an underlying (stocks, rates, commodities)

Definition

Derivatives are financial contracts whose value depends on the price of an underlying asset. Common types include options, futures, forwards, and swaps. They're used for hedging risk or speculation and can amplify both gains and losses.

Related Topics

#financial contract #underlying asset #hedging #leverage

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