Mitessa-Inah R.

Reynante
 The term “Derivative” stands for a contract whose price is derived from or is
dependent upon an underlying asset.
 Traders, who wish to protect themselves from the risk involved in price
movements, participate in the derivatives market.
 Traders who enter the future market for pursuit of profits, and accepting risk in the
endeavor
 Future Contracts OTC (Over the
counter) Trading
 Forward Contracts

 Options Exchange Traded

Derivatives
 Swaps
Transferring risks
Discovery of future as well as current prices
Catalyzing entrepreneurial activity
Increasing saving and investments in long run
-it is also called off-exchange trading is to trade financial instruments such as stocks,
bonds, commodities or derivatives directly between two parties without going
through an exchange or other intermediary.
 Exchange traded derivatives contract (ETD) are those derivatives instruments that
are traded via specialized derivatives exchange or ther exchanges.