Financial innovation is the most important development trend in contemporary international financial circles, and it is the main driving force for the upgrading of financial structure and financial development. The core content of financial innovation is the innovation of financial instruments, and the continuous emergence of financial derivatives has changed the face of the whole financial field. A derivative instrument is a financial instrument (or contract), and its value depends on the value of another asset or the reference interest rate or index. The financial derivatives mainly used in practice include forward, futures, options and swaps. These derivatives play a role in managing risks, finding prices and improving transaction efficiency in the financial market, bringing good social benefits. Generally speaking, financial derivatives are fictitious, leveraged and risky by predicting the future trends of interest rates, exchange rates, stock prices and commodity prices, signing contracts by paying a small amount of margin or equity, or exchanging different financial commodities with each other.

Derivatives are also called financial derivatives.

abstract

Financial asset derivatives are the product of financial innovation, that is, by creating financial instruments to help managers of financial institutions better control risks, which is called financial derivatives. At present, the main financial derivatives are: forward contracts, financial futures, options and swaps.

Ordinary derivatives

(1) futures contract. Futures contract refers to the standardized contract made by the futures exchange to deliver a certain quantity and quality of physical or financial goods at a specific time and place in the future.

(2) Option contract. Option contract refers to the option contract that the buyer of the contract can get after paying a certain amount. At present, warrants in China's securities market belong to call options, while put warrants belong to put options.

(3) Forward contracts. Forward contract refers to a contract in which both parties agree that the buyer will buy a certain amount of subject matter from the seller at an agreed value on a certain date in the future.

(4) swap contracts. A swap contract refers to a contract in which both parties exchange a series of cash flows in a certain period in the future. According to different contract items, swaps can be divided into interest rate swaps, currency swaps, commodity swaps and equity swaps. Among them, interest rate swap and currency swap are more common.