A financial derivative is a financial instrument that is traded at an exchange. It derives its value from an underlying asset. The underlying asset could be stocks, currencies, commodities, indices, and even interest rates. Financial derivatives were originally designed to help investors reduce exchange rate risks, but their utility has grown over the years to help investors not only mitigate various types of risks but also to access more market opportunities.
Derivatives products over the years have become attractive to investors because they provide an opportunity to trade on the price changes of underlying assets without becomingan owner of these underlyings.
At the end of the course, you would be able to understand :
- What is a derivative instrument?
- Types of Financial Derivatives
- Use of Financial Derivatives
- Basics of Derivatives Trading