Derivative financial assets are also called financial derivatives. Financial derivatives, also known as "financial derivatives", are a concept corresponding to basic financial products. They refer to basic products or foundations. A derivative financial product based on a variable whose price changes with the price (or value) of the underlying financial product. The basic products mentioned here are a relative concept, including not only spot financial products (such as bonds, stocks, bank time deposit certificates, etc.), but also financial derivatives. Variables that are the basis of financial derivatives include interest rates, exchange rates, various price indexes, inflation rates and even weather (temperature) indices.

⒈Intertemporal nature. Financial derivatives are contracts in which both parties to a transaction predict the changing trends of factors such as interest rates, exchange rates, stock prices, etc., and agree to conduct transactions or choose whether to transact under certain conditions in the future. No matter what kind of financial derivatives it is, it will affect the trader's cash flow in the future or at some point in the future. The characteristics of intertemporal trading are very prominent. This requires both parties to the transaction to make judgments on the future trends of price factors such as interest rates, exchange rates, and stock prices. The accuracy of the judgment directly determines the trader's profit and loss.

⒉Leverage. Financial derivatives transactions generally only require the payment of a small amount of margin or premium to sign a large forward contract or swap different financial instruments. For example, if the futures trading margin is 5% of the contract amount, the futures trader can control contract assets 20 times the transaction amount, achieving the effect of using small to win big. While profits may be multiplied, the risks and losses borne by traders will also be multiplied. Slight changes in the price of basic instruments may lead to large profits and losses for traders. The leverage effect of financial derivatives determines its high speculative nature and high risk to a certain extent.

⒊Linkage. This means that the value of financial derivatives is closely related to the underlying products or underlying variables, and the rules change. Usually, the payment characteristics associated with financial derivatives and underlying variables are specified by the derivatives contract, and the linkage relationship can be a simple linear relationship, or it can be expressed as a nonlinear function or a piecewise function.

⒋Uncertainty or high risk. The trading consequences of financial derivatives depend on the accuracy of the trader's prediction and judgment of the future price (value) of the underlying instrument (variable). The unpredictable price of basic instruments determines the instability of profits and losses in financial derivatives transactions, which is an important reason for the high risk of financial derivatives.

Price uncertainty of basic financial instruments is only one aspect of the risk of financial derivatives. In a report (ISOCOPD35) published by the International Organization of Securities Commissions in July 1994, it was believed that financial derivatives are also accompanied by the following risks: