What is derivatives contract

Question

Accepted Answer

A derivatives contract is a financial agreement between two parties based on an underlying asset.

Derivatives contracts derive their value from an underlying asset such as stocks, bonds, commodities, or currencies.
They are used for speculation, hedging, or arbitrage purposes.
Common types of derivatives contracts include futures, options, swaps, and forwards.
These contracts allow investors to take positions on the price movements of the underlying asset without owning it.
For example, a futures contract allows an investor to buy or sell an asset at a predetermined price on a future date.
Derivatives contracts are traded on exchanges or over-the-counter (OTC) markets.

Accepted Answer

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset.

Accepted Answer

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset.

What is derivatives contract

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