derivatives

[mmuzopa]

What are derivatives

[Loosehead]

They are devices for gambling on the financial markets without actually buying or selling anything. There are specialist firms offerring all manner of "bets" on the movement of anything from the footsie to price of sugar.

[Clanad]

Derivatives are usually contracts ...a contract is an agreement between two parties, where the contract details may not be the same from one contract to another. The most common types of derivatives that ordinary investors are likely to come across are futures, options, warrants and convertible bonds. Beyond this, the derivatives range is only limited by the imagination of investment banks. It is likely that any person who has funds invested, an insurance policy or a pension fund, that they are investing in, and exposed to, derivatives - wittingly or unwittingly. (With help from Deriviatives FAQ)