Derivatives

Derivatives are financial contracts for which the price is derived from the value of one or more other instruments. These are called underlying(s) of the derivative and they can be equities, bonds, commodities or precious metals, or benchmarks such as currencies, interest rates and indices.

Hence, for example, an equity option derives its value from the “underlying” equity. There are different types of derivatives, including forwards, futures and combinations as well as options, swaps and structure products.

 

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