What you should know before investing in a derivatives market?

Angelalisha9826 Jul, 2017Other

If you are an investor and want to equitably manage and tailor your underlining investment goals, you can do so using derivatives. Derivativeis a security whose price is based upon or derived from one or more underlying assets. Derivatives is a contract between two or more parties based upon assets. The value of the derivative can be determined by fluctuations in the assets. The assets can be interest rate, shares, bonds, commodities, currencies etc. For example, stock options are an asset in a derivative since its price is derived from the underlying stock. These financial instruments help you gain profit by betting on the future price of the underlying assets.