Derivatives Decoded: Understanding Their Impact on Modern Financial Markets

Snhe.sharma6444@gmai28 Aug, 2024Finance

Derivative trading are complex financial instruments whose value is derived from underlying assets like stocks, bonds, or commodities. They play a significant role in modern financial markets by enabling risk management and speculative opportunities. Common types include futures, options, and swaps. Derivatives can be used to hedge against price fluctuations, but they also carry high risk due to their leveraged nature. Understanding the mechanisms and potential impacts of derivatives is crucial for investors.