Derivative Definition

A derivative is a financial instrument whose value is based on the price of an underlying asset, index, or rate.

What is a Derivative?

Common derivatives include futures, options, and CFDs, which allow exposure to an asset's price without owning it directly.

Derivatives can be used for speculation, hedging, or gaining leveraged exposure to a market.

A CFD on gold is a derivative because its value tracks the price of gold without the trader owning physical gold.

Day trading is a strategy where positions are opened and closed within the same trading day.

A dealing desk is a broker execution model where client orders are processed internally rather than sent directly to external liquidity providers.

A debenture is a type of unsecured bond backed only by the general creditworthiness of the issuer rather than specific collateral.