Derivatives are financial securities whose value is derived from
another "underlying" financial security. Options, futures,
swaps, swaptions, structured notes are all examples of
derivative securities. Derivatives can be used hedging,
protecting against financial risk, or can be used to speculate
on the movement of commodity or security prices, interest rates
or the levels of financial indices. The valuation of derivatives
makes use of the statistical mathematics of uncertainty, which
is very complex.
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