Derivatives
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Over time, financial institutions such as banks or other, have been added to its wide variety of products marketed, some financial products that have been called derivatives or derivative instruments.
This has been able to make investments as common as buying the shares on classical bagOr hire an investment fund and of course tanks saving to derivatives, A complex investment instruments and high risk.
The derivativesare product which has the peculiarity that its value is linked to changes in the price of another asset or financial product, and can find multiple assets on which they depend and which are called underlying assets.
Thus, among the underlying assets that are referenced on the derivativesWe find for example all kinds of actions but mainly find actions companies important, can also be referenced on all types of commodities such as oil or wheat … or be linked to stock indexes, bonds, interest rates …
If anything highlights the derivativesis that their recruitment requires a low investment unlike for example the payment to be done but also to buy shares of these financial products also highlight the high risk involved as both earnings such losses can be very high.
But the purpose of the derivatives not only investment but also to speculate given the little capital is needed and also to reduce losses as a cover for what instruments can be used as popularly known as warrants or futures.
The main features of the derivatives are:
- For your hiring, investment to be undertaken is very low.
- They have an expiration date.
- Its value fluctuates with the value experienced by the underlying asset that is referenced.
- Also, some publicly traded derivatives or secondary markets as the MEFF or CME.
Basically the types of derivatives we can find, we have:
Futures: the derivative instrument not to pay anything at the time of recruitment but if you have a warranty and when the contract expires, execute the transaction at the agreed price.
Options: derivative in which if you have to initially pay a small premium and in some cases an additional warranty but instead, the losses are limited. Furthermore, the buyer has the right but not the obligation to buy or sell the underlying asset at a certain price point.
