Financial derivatives refer to financial contracts whose value depends on one or more basic assets or indexes. The basic types of 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.

This kind of contract can be standardized or non-standardized. Standardized contracts mean that the transaction price, transaction time, asset characteristics and transaction methods of the subject matter (basic assets) are standardized in advance, so most of these contracts are listed and traded on exchanges, such as futures. Non-standardized contract means that the above matters are agreed by both parties to the transaction, so it has strong flexibility, such as forward agreement.

Financial derivatives are financial-related derivatives, which usually refer to financial instruments derived from basic assets. Its * * * is characterized by margin trading, that is, as long as a certain percentage of margin is paid, the full amount can be traded without actual principal transfer, and the contract is generally settled by cash difference. Only contracts performed by physical delivery on the due date require the buyer to pay all the loans. Therefore, financial derivatives trading has leverage effect. The lower the margin, the greater the leverage effect and the greater the risk.