From Traderpedia

Definition: A financial instrument which has its value determined by (derived from) the value of an underlying instrument, figure, result, or event.

Contents 1 Underlying Instruments and Markets 2 Usage of Derivatives 3 Types of Derivatives 4 Where to Trade Derivatives 5 T2W links

[edit] Underlying Instruments and Markets

Among the securities, instruments, and markets for which derivative securities are created and traded are:

• Individual Stocks & Shares
• Indices
• Foreign Exchange
• Commodities
• Fixed Income & Money Market Securities

[edit] Usage of Derivatives

Derivatives were originally created for the purposes of hedging. They maintain that focus, though speculators have taken to them as well. The appeal is that they provide those who use them the ability to target very specific objectives.

[edit] Types of Derivatives

• Options
• Futures
• Forwards
• Warrants
• Swaps

Contracts for Difference (CFDs) can also be considered derivatives, as can convertibles.

[edit] Where to Trade Derivatives

Non-standardized derivatives trade over-the-counter and/or via the inter-bank market. Standardized derivatives are exchange traded. Some of the exchanges are:

• Chicago Board of Trade (CBOT)
• Chicago Board Options Exchange (CBOE)
• Chicago Mercantile Exchange (CME)
• New York Stock Exchange (NYSE)
• Philadelphia Stock Exchange (PHLX)

[edit] T2W links

• Forum
• Knowledge Lab