A transaction consisting of or derived from another security (stock, bond, currency or commodity). Derivative instruments include forward contracts, futures contracts, swaps and options, and instruments with one or more characteristics of forward contracts, futures contracts, swaps and options. Option is the most typical derivative tool. Derivation: refers to a new substance (such as substitution or hydrolysis) produced by evolution and obtained from the mother.

Hedge funds:

Hedge fund, also known as hedge fund or arbitrage fund, refers to a financial fund that combines financial derivatives such as financial futures and financial options with financial institutions and obtains profits by means of high-risk speculation. It is a form of investment fund, which belongs to exempt market products. It means "risk hedge fund". Hedge funds are called funds, which are essentially different from mutual funds in terms of security, income and appreciation. (Derivatives are explained above)