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Published on Feb 23, 2022

Derivative

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#Glossary
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Derivatives are financial instruments whose values are determined based on the value of the underlying asset. Derivatives are often used for mitigating risks. For investors buying large assets, they may often sign a derivative contract, ensuring they get the asset over a fixed price.

This helps to hedge against any fluctuation in the asset valuation. Derivatives markets are often subjected to speculations as well. So, instead of owning a given asset, traders can also bet on its future value.

Derivatives are also gaining popularity within the crypto market. Even crypto derivatives are readily available in some exchanges. This ensures the further expansion of derivatives similar to any traditional global exchange like NASDAQ.


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