Derivative products (Financial instruments for the future)

A derivative product or forward financial instrument is a contract allowing the purchase or sale, at a fixed date, at an agreed price, of a certain quantity of a financial instrument (which can be a stock, a bond, a currency, an index, a fund, etc.), or to exchange different cash flows at a fixed date.

These contracts can be firm or optional. They can be traded on a regulated market or over-the-counter; they are often referred to as "derivatives" because their value "derives" from that of an underlying asset. The value of forward financial instruments varies according to that of the underlying asset. Financial instruments can be a means to take a particular exposure or can conversely serve as a hedge against an exposure.

Derivative products encompass a wide range of financial instruments such as certificates, warrants, futures contracts or Futures, swaps, options.