Definition of Derivatives

Derivative is a financial instrument whose value depends on the price of a particular underlying asset. Though any tradable item can be the underlying asset, the most common ones are –

• A financial instrument – such as Equity, Bonds, Index, Foreign Exchange, Interest Rates Mortgages, Cryptocurrencies, etc.
• A physical commodity – such as Crude and its components, Gold and other precious metals, Agricultural products such as Wheat and Corn, Livestock products, Timber, etc.
• ESG products – such as renewable energy, environmental change, weather products, sustainable investments, etc.