Derivatives Market
The derivatives market is a financial market where contracts such as futures, options, forwards, and swaps are bought and sold. These contracts derive their value from an underlying asset, which can be stocks, commodities, currencies, or other financial instruments. This market allows investors to hedge risks, speculate on price movements, or leverage positions. It's a complex subset of other markets, including the stock, commodity, and currency markets, based on the underlying asset linked to the derivative contract. The derivatives market provides opportunities for both risk management and speculation.
Related Terms
Direct Public Offerings
A Direct Public Offering (DPO) enables a company to sell shares directly to the public,...
Long-Term Capital Gain Tax
Long-term capital gain tax is the tax levied on profits from the sale of shares...
Doji Pattern
A Doji is a candlestick pattern that occurs when the open and close prices of...
Dividend Reinvestment Plan (DRIP)
A Dividend Reinvestment Plan (DRIP) allows investors to reinvest the dividends they earn from stocks...
Return on Equity (ROE)
Return on Equity (ROE) is a key profitability ratio that measures how effectively a company...
Holding Period
The holding period of a financial security refers to the duration between the time an...
