The so-called derivatives refer to things derived from the original, such as soybean milk, which can be called soybean derivatives. Financial derivatives refer to the transaction forms derived from the traditional financial business in the past.

According to the definition of financial circles, financial derivatives are bilateral contracts between traders to exchange cash flow or transfer risks. Common ones are forward contracts, futures, options and swaps. There are many kinds of financial derivatives in the world. At present, the financial derivatives trading in China mainly refers to the financial business centered on futures. Futures can be divided into commodity futures and financial futures. The latter mainly includes currency futures, interest rate futures and index futures.

Judging from the types and definitions of financial derivatives, its biggest feature is to rely on an investment mechanism to avoid the risk of capital operation, and at the same time, it has the functions of speculative trading in financial markets and attracting investors.