Types and Applications of Derivative Products

Hedging
Knowledge Center

 

Next Topic

Hedging > Forum

Siddhartha Phukan, Entrepreneur, United States
🔥NEW The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking-in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors. Derivative products initially emerged as hedging devices against fluctuations in commodity prices and commodity-linked derivatives remained the sole form of such products for almost three hundred years. Financial derivatives ca (...) Read more? Sign up for free

Please register now to read all responses and to join this discussion yourself. It's easy and 100% free.

Sign up for free     Log in


  Jaap de Jonge, Editor, Netherlands
 

Categories of Derivatives

There are 4 main categories of derivative contract (...)

 
More on Hedging
Summary
Forum
Types and Applications of Derivative Products
Hedging and Transfer Pricing
Special Interest Group Leader

Are you an expert in Hedging? Sign up for free


Hedging
Knowledge Center

 

Next Topic



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2020 12manage - The Executive Fast Track. V15.6 - Last updated: 25-10-2020. All names of their owners.