Popular explanation of financial derivatives ~ don’t read in books ~ don’t understand ~

Derivative financial assets are also called financial derivatives. Financial derivatives, also known as "financial derivatives", are a concept corresponding to basic financial products. They refer to basic products or foundations. A derivative financial product based on a variable whose price changes with the price (or value) of the underlying financial product.

The basic products mentioned here are a relative concept, including not only spot financial products (such as bonds, stocks, bank time deposit certificates, etc.), but also financial derivatives. Variables that are the basis of financial derivatives include interest rates, exchange rates, various price indexes, inflation rates and even weather (temperature) indexes.

Extended information:

The creation and development of financial derivatives is called innovation of financial instruments. The financial industry in the United States is quite developed, but it is subject to strict government regulation. Therefore, American financial institutions have created many financial derivatives to avoid regulation. New financial derivatives, including various financial futures, options, and currency swaps, appeared one after another and were later widely spread in other countries.

A number of emerging financial markets have also emerged around the world, such as the Chicago International Currency Market, the Singapore International Currency Trading Center, the London International Financial Futures Exchange, the French International Financial Futures Exchange, etc., engaging in financial derivatives transactions. .

The development of electronic computers has revolutionized the processing and transmission of financial information, resulting in terminal services, point-of-sale systems, home banking, and automated clearing houses, all of which facilitate customers. And make financial innovation activities more penetrating among the people.

Baidu Encyclopedia-Derivative Financial Assets