• Shares
• Bonds
• Futures and Options
• Stock Exchange

The most common forms of derivatives are futures and options. A futures contract is an agreement between two parties to sell or buy an underlying asset on a set future date at a set price. A future contract is usually traded on the futures exchange, as an option for hedging an existing trade or for speculation by predicting the market looking for profit.

Options, similar to futures, are contracts for an agreement of selling or buying on a set future date at a set price. In this case however, buying or selling (call or put option) is optional for the contractor. For example a call option with a higher price than the current market price will not be executed, the contract price is still due.