Hello, financial derivatives refer to financial contracts whose value depends on one or more basic assets or indexes. The basic types of financial derivative contracts include forward, futures, swaps and options. Financial derivatives also include mixed financial instruments with one or more characteristics of forward, futures, swaps and options.

Financial derivatives have the following basic characteristics:

1 intertemporal. Financial derivatives refer to contracts in which both parties agree to trade or choose whether to trade at some future time by predicting the changing trend of interest rate, exchange rate and stock price. Financial derivatives will affect the cash flow of traders in the future or at a certain point, which embodies the characteristics of intertemporal transactions.

2 lever. Financial derivatives trading-generally, you can sign long-term large contracts or exchange different financial instruments by paying a small amount of margin or royalties. At the same time, the risks and losses borne by traders will increase exponentially, and a slight change in basic tools may bring big profits and losses to traders.

3 linkage. The value of financial derivatives is closely related to basic products or basic variables. Usually, the payment characteristics of financial derivatives associated with basic variables are stipulated by derivatives contracts, and their linkage relationship can be simple linear relationship, or can be expressed as nonlinear function or piecewise function.

4 high risk. The consequences of financial derivatives trading depend on the accuracy of traders' prediction and judgment on the future price of basic tools. The unpredictability of the price of basic instruments determines the instability of the profit and loss of financial derivatives trading.