The Ultimate Guide to Financial Derivatives: Unlocking the Power of Complex Investments
Financial derivatives are financial instruments whose value depends on the value of an underlying asset. The underlying asset can be anything from a stock to a bond to a commodity like oil or gold. Financial derivatives are used to manage risk and to speculate on the future price of the underlying asset.
Financial derivatives are an important part of the financial system. They allow investors to hedge against risk and to speculate on the future price of assets. Financial derivatives have also been used to create new and innovative financial products, such as exchange-traded funds (ETFs) and credit default swaps (CDSs).