Derivative product is a kind of financial instrument, which is generally manifested as an agreement between two subjects, and its price is determined by the prices of other basic products.

And there are corresponding spot assets as the subject matter, which need not be delivered immediately when the transaction is completed and can be delivered at some time in the future. Typical derivatives include forwards, futures, options and swaps.

The transaction of financial derivatives deals with the rights and obligations of basic instruments under certain conditions in the future, which is legally understood as a contract and an economic contractual relationship based on highly developed social credit.

Types of financial derivatives

There are many kinds of financial derivatives in the world, and more and more things belong to this category because of the continuous introduction of new varieties in financial innovation activities. Judging from the basic classification, there are mainly the following categories:

(1) can be divided into four categories according to product form: forward, futures, options and swaps.

(2) Classification by primary assets, namely, stocks, interest rates, exchange rates and commodities. If subdivided, stock categories include stock index futures and option contracts formed by specific stocks (stock futures and stock option contracts) and stock combinations.

Interest rates can be divided into short-term interest rates represented by short-term deposit rates (such as interest rate futures, interest rate forwards, interest rate options and interest rate swap contracts) and long-term interest rates represented by long-term bond rates (such as bond futures and bond option contracts); Currency categories include the ratio between different currencies; Commodities include all kinds of bulk physical commodities.

Refer to the above content: Baidu Encyclopedia-Derivatives