In Business, What Is a Derived Demand?

The so-called derivatives refer to things derived from native things, such as soybean milk can be called derivatives of soybeans. Financial derivatives refer to the transaction forms derived from the traditional financial business in the past. According to the definition of the financial community, a financial derivative is a bilateral contract that involves swapping cash flows or is designed to transfer risk for traders. Commonly, there are forward contracts, futures, options, swaps, etc., and they are internationally classified as financial derivatives. There are many varieties. At this stage, financial derivatives transactions in China mainly refer to futures-centric financial services. Futures can be divided into commodity futures and financial futures, the latter mainly includes currency futures, interest rate futures and index futures.

Financial Derivative Business

Derivatives: means that their value depends on

Financial derivatives have the following characteristics:

1.

(1) According to product form. Can be divided into long-term,

(2) According to the original assets, they can be roughly divided into four categories: stocks,

(3) According to the transaction method, it can be divided into

Financial derivatives , also known as "financial derivatives", are a concept corresponding to basic financial products. They are derived financial products that are based on basic products or basic variables and whose prices change with the price (or value) of the basic financial product. product. The basic product mentioned here is a relative concept, including not only spot financial products (such as bonds, stocks, bank time deposit notes, etc.), but also financial derivatives. The variables that underlie financial derivatives include interest rates, exchange rates, various price indexes, and even weather (temperature) indexes.

Derivative instruments of financial assets are the product of financial innovation, that is, by creating financial instruments to help financial institution managers better control risks, such instruments are called financial derivatives. The most important financial derivatives are: forward contracts, financial futures, options and swaps.