By Investment U Research Team The derivatives market doesn’t deal with fungible assets. Instead, it’s a secondary market focused on the volatility of capital markets and assets. As the name implies, the financial products traded in this market are derivations of underlying values. It’s also a market steeped in volatility. Not only is there price fluctuation in the underlying assets, derivative buying and selling also generates volatility.
Derivatives are largely seen as speculative investments. This market caters to hedgers, speculators, margin traders and arbitrageurs. Derivative investors typically have a specific reason for participating in this market. For example, one might buy a futures contract to …read more
