The so-called derivatives refer to things derived from original things. For example, soy milk can be called a derivative of soybeans. Financial derivatives refer to transaction forms derived from traditional financial businesses in the past.

According to the definition of the financial industry, financial derivatives are bilateral contracts related to swap cash flows or designed to transfer risks for traders. Common ones include forward contracts, futures, options, swaps, etc. , there are many types of financial derivatives internationally. At the current stage in our country, financial derivatives trading mainly refers to financial businesses centered on futures. Futures can be divided into commodity futures and financial futures, the latter mainly including currency futures, interest rate futures and index futures.

From the perspective of the types and definitions of financial derivatives, their biggest feature is that they rely on an investment mechanism to avoid the risks of capital operations, and at the same time have the function of speculating on transactions in the financial market and attracting investors.

What are derivative financial products?

Derivative financial products refer to trading contracts whose values ??are derived from assets, interest rates, exchange rates, or indices, such as futures and forwards. Contracts, interest rate exchanges, currency exchanges and option contracts, etc. In other words, they are commodities derived from traditional or basic financial markets (including money markets, bond and stock markets, foreign exchange markets, etc.); in other words, they are commodities derived from spot markets such as foreign exchange, bonds, stocks, and short-term bills. Derived financial products. Specifically, a derivative financial product is a financial instrument or contract whose value is determined by the buyer and seller based on the value of the underlying asset (such as the exchange rate of foreign exchange, the interest rate of short-term bills, the price of stocks, etc.) or other indicators such as stock price indexes. , determined by the price index.