Derivatives

Refreshed November 2024 | CPD time: 1 Hour

A derivative can be simply defined as ‘a contract between two or more parties; the price of which is based on an underlying asset, which can be a stock, bond, commodity, currency, interest rate, market index or other baskets. Derivatives are designed to reduce or hedge the risk of uncertain price outcomes and can be used purely as means of speculation to try and generate profits. This module provides an understanding of the definition and purpose of derivatives, underlying assets, trading and regulatory requirements and developments.