Understanding Derivatives
Derivatives are financial instruments whose value is dependent on the value of other underlying variables. They are often used for hedging risks or for speculation. Common types include futures, options, and swaps.
Essentially, derivatives derive their value from the performance of an asset, event, or a set of elements that are usually observable in the financial markets. 📈👌
Learn more about Hedging Strategies and Risk Management.
Key Features of Derivatives
- Leverage: Amplifies returns and risks. 💥
- Flexible: Can be tailored to specific needs.
- Margin Use: Often require only a small margin to open positions.