Derivatives Trading


Definition: Derivatives Trading is the practice of buying and selling a wide range of financial instruments whose values are derived from one or more underlying assets, market securities or indices.
The most common underlying assets are: commodities, stocks, bonds, interest rates and currencies.
Derivatives can be used for both risk management (an insurance that provides an offsetting compensation in case of an undesired event , “hedging”) and for speculation (increasing the gains by making a financial "bet").


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