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DERIVATIVES

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Derivatives: Resources

Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on exchanges, both organized and OTC, all over the world. Present-day financial institutions, treasurers, fund and portfolio managers, and even industrial firms and manufacturers directly or indirectly deal in swaps, options, futures, forward contracts, and other types of derivatives. So often, traders and speculators find it more alluring to trade derivatives on assets than to trade the very assets.

The derivatives traded on organized exchanges are standardized instruments that have been defined by the exchanges (like The Chicago Board of Trade, Chicago Mercantile Exchange, Chicago Board Options Exchange, etc) and usually feature standard quantities, delivery dates, and specified underlying assets... read more »

A futures contract whose underlying is pollution rights. In the United States, it refers to a futures contract based on U.S.-based utilities' transferable right to emit sulphur dioxide. This relatively new type of futures contracts was introduced as a result of the Clean Air Act of 1990 ... read more »