Derivatives are financial instruments which have their value determined by (derived from) the value of an underlying instrument, figure, result, or event. They come in a wide array of types and purposes. Some are standardized and traded on exchanges, while others are customized and transacted over-the-counter. Derivatives were originally created for the purposes of hedging, and maintain that focue in many ways, though speculators have taken to them as well.
Types of Derivatives