What is financial derivate?

Is an instrument capable of 2
managing common risks in the
operations of companies.

Key words 3

• Financial asset
• Underlying asset

4
 Characteristics 1

 Does not require a large initial

investment, or this is very small 2
in relation to the investment
required if you wanted to trade
directly with the underlying
asset.
3
 See leverage in derivatives.
 It is generally settled at a future
date. That is, in the term.

4
Types of derivates

Futures Options

Forwards Swaps
 Types of derivates

Futures

They are used to exchange an underlying asset

at a future date and at a previously determined
price, which protects buyers from drastic changes
in asset prices. They are mostly used to trade
commodities. Options
The options are contracts that are made betwen two parties and
allows the owner to buy (call) or sell (put) assets at a specific price
and a specific date or earlier. They are used most frequently in stock
transactions. In the options, the buyer has the right to buy or sell the
underlying asset. While the seller is obliged to buy or sell at the
agreed price, as long as the buyer has exercised his right.
 Types of derivates

Forwards

Forwards on the other hand are another type of

OTC financial derivative and are used to buy or
sell an asset at a previously agreed value on a
specific date in the future.
Swaps
Swaps offer investors the possibility of exchanging assets or
debts for another of similar value, managing to reduce the
risks for the parties involved. The swaps gave rise to the CDS
(Credit Defaul Swap), which were sold as insurance against
the breach of municipal bonds and that collaborated with the
financial crisis of 2008.
Derivate markets

It is a financial instrument which has different

tools to manage and control the risk on the value
of an asset against possible price variations.
 Financial derivative in DR.

One of the main features needed to achieve greater economic development in any
country is the existence of a complete, efficient and transparent market. To that end it
is necessary to count on an adequate regulatory framework to regulate the activities
of the participants in the stock markets, its interrelations and business.
The Law No.19’00 was promulgated in the Dominican Republic on May 8th, 2000.
The implementation of this Law together with other bills presently being considered by
the National Congress and the Executive Branch itself is intended to revolutionize the
Dominican financial sector, in­creasing competitiveness among its actors, adapting it to
market needs and as a consequence accelerating the development of our economy.
 Financial derivative profit

The main function of a financial derivative is risk management ... Of course, risk
management implies that it can be reduced or increased. Speculators pursue risk
exposure to benefit from the price change in the underlying asset, which will have a
leveraged effect on their investment. Derivatives are simply contracts between agents
who want to transfer the risk, allowing them to be used for opposite purposes and
there are up to three types of agents that use derivatives
Bianca Geronimo 2017 - 1591
Johan Moya 2017 - 1264
Chantal Rivas 2019 - 2028
Darlennys Rodriguez 2010 - 0620
Rubi Lugo 2015 - 0935
Francys Martinez 2016 - 2787