These are financial instruments whose value is derived from the performance of one or more underlying assets, such as stocks, stock indexes, currency exchange rates, interest rates, commodities or bonds. A "derivatives" contract is effectively an agreement between the parties involved to exchange cash or assets over time based on the movement in value of the underlying asset – rather than trade or exchange the underlying asset itself. The main types of "derivatives" are futures, forwards, options and swaps.
Benjamin Pedley Senior Director, Head of Investment Strategy, North Asia HSBC Private Bank |
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