Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected.
—George Soros (1930–Present)Hungarian–American investor and philanthropist
Just an Introduction
A derivative is a securities instrument, which is a higher risk, and one that you cannot own. For instance, you own shares that you buy, but a future’s contract enables you to acquire the potential growth of its underlying security.
Let me simplify the aforementioned:
• If you bought 10,000 dollars worth of a share (Company ABC), then you own that stock.
Your risk profile is 10,000 dollars. ...