Financial Derivatives are instruments whose payoffs largely depend on more fundamental or primitive good. These are contractual relationship between parties in which payoffs are derived from agreed benchmarks. Financial derivatives are not complete without the underlying products or commodities.
In other words, financial derivatives are financial instruments whose payoffs are dependent upon other financial instruments underlying
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If you want to trade in options other than traditional bonds and stocks, then derivative trading seems to be a good alternative. The pay offs of derivatives depend upon the performance of the assets, indices, exchange rates and rates of interest.
The pay offs can be in the form of assets or cash and can be
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