The word “Derivatives” simply means that something has no independent value. In other words, it borrows its value from some other underlying. The underlying can be indices from the stock market, securities, commodities, currencies, or even bullion among many other things. The derivatives are products that are unique and come in handy in when hedging a portfolio against any future risks. Derivatives are also used for speculation and arbitrage purposes as well.

This entry was posted in . Bookmark the permalink.