A derivative is a financial instrument that enables traders to speculate on the price movement (“change in price”) of assets without purchasing the assets themselves.
The value of a derivative is dependent upon or DERIVED from the value of its underlying asset, which can include bonds, stocks, commodities, crypto, or currencies.
Because there is nothing physically being traded when derivative positions are opened, they exist as a contract between two parties.
This contract is known as a contract for differences (CFD).
Status:: #wiki/notes/mature
Plantations:: Investing
References:: Babypips