What Are the Different Types of Financial Derivatives?
The financial derivative market refers to trading venues where various financial contracts are the trading objects.
Financial derivatives market
- In the 1970s, with the collapse of the Bretton Woods system and the oil crisis, a serious
- 1. Leverage [2]
- First, the development of the financial derivatives market is of great significance to improve the national financial market system, improve the efficiency of financial operations, and maintain financial security. [3]
- According to different trading venues, the financial derivatives market is divided into exchange markets and over-the-counter markets (over-the-counter markets). [1]
- There are four broad categories of participants in the financial derivatives market: hedgers, speculators, arbitrageurs and brokers. [4]
- Value holder
- The purpose of hedgers' participation in the financial derivatives market is to reduce or even eliminate the risks they are already facing.
- Speculator
- In contrast to hedgers, speculators want to increase future uncertainty. They do not have a net position in the underlying market or assets that need to be preserved. Their purpose in participating in the financial derivatives market is to earn between forward prices and future actual prices. The difference.
- Arbitrageur
- If speculators are required to bear certain risks in order to obtain profits, arbitrageurs' profits are very easy. They trade in two or more markets at the same time to obtain profits without any risk.
- 4. Broker
- Brokers appear as intermediaries between traders and clients.