Overview
Advanced financial instruments play a crucial role in modern finance, allowing investors to manage risk and speculate on market movements. These instruments, including derivatives like options, futures, and swaps, provide various strategies for hedging and investment. Understanding these tools is es...
Key Terms
Example: Options and futures are types of derivatives.
Example: A call option allows buying a stock at a set price.
Example: Futures contracts are commonly used in commodities trading.
Example: Interest rate swaps exchange fixed and floating interest payments.
Example: Using options to hedge against stock price declines.
Example: Traders must maintain a margin account to trade futures.
Related Topics
Risk Management
The process of identifying, assessing, and controlling financial risks.
intermediateInvestment Strategies
Techniques used to allocate assets and manage portfolios effectively.
intermediateFinancial Markets
Platforms where financial instruments are traded, including stocks and bonds.
intermediateKey Concepts
DerivativesOptionsFuturesSwaps