For example:
A stock is now 100 yuan. You can buy one share at 100 yuan, so if the stock goes up by one yuan, you earn one yuan, you lose one yuan, and your profit-loss ratio is 1%, which is the same as the stock price. No leverage.
In the case of leverage:
The same stock is 100 yuan. Take 48 yuan money to buy a three-month call option with the exercise price of 100 yuan. If the stock goes up by one yuan, the contract in your hand will go up by one yuan, but the return will be more than 2%. Similarly, it also fell by 1 yuan when it fell, with a return of -2%. So this call option will amplify both gains and losses.
Financial derivatives are financial instruments based on basic financial instruments, such as currency, exchange rate, interest rate and stock index. ), and they are also financial products derived from traditional financial products and used as trading objects.
Different from other financial instruments, financial derivatives have no value in themselves, and their prices come from the value of currencies, exchange rates and securities that derivatives can buy and sell. The most widely used derivatives in the international financial market are financial futures, options and swaps (also called swaps).
Financial derivatives are financial instruments based on or derived from financial basic products (such as currency, exchange rate, interest rate and stock index). ) and they are also derived from traditional financial products. Different from other financial instruments, financial products that are the subject of transactions are worthless.
Its price comes from currency, exchange rate and the value of securities that can be bought and sold through derivatives. The most widely used derivatives in the international financial market are financial futures, options and swaps (also called swaps).