Sunday, 25 December 2016

What are derivatives?

A
derivative is a broad category of securities, based on the price of an underlying asset.  It is
a contract between two parties based upon an asset where the price or value fluctuates.  Common
types of derivatives are stocks, bonds, currencies and market index.  In the simplest of terms,
a derivative is a bet between two parties based on whether the value of an asset will increase
or decrease over time.

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