Derivatives Financial Instruments
Derivatives financial instruments are financial contracts whose value is derived from the performance of an underlying asset, index, or interest rate. These instruments can include options, futures, forwards, swaps, and other complex financial products. They are used by investors and companies to hedge against risk, speculate on price movements, and manage portfolio exposure. Derivatives can be traded on exchanges or over-the-counter (OTC) and can involve a high level of leverage and risk.