Derivative Market

Before knowing derivatives market, you should know meaning of derivative. Derivative is finance term and it means to pay advance for purchasing the asset in future. Main benefit to derive is to minimize the future risk due to fluctuation in the market. Now, it is very simple for me to teach you derivative market. Any market where buyer buys financial instruments on derives condition that market is called derivative market. Derivative market is the place where investors can take the benefit of leverage and transferring of risk. Some companies sell their financial product like hedge or mutual fund as derivative products. Derivative market is playing major role to reduce investor’s risk, balance in financial market and increasing the habit of saving of fund. Derivative market can be classified into future, forward, options and swaps market.