Derivatives
Derivatives are leveraged instruments that are linked to either specific
financial instruments or indicators (such as foreign currencies, government
bonds, share price indices, or interest rates) or to particular commodities
(such as gold, sugar, or coffee) that may be purchased or sold at a future
date. Derivatives may also be linked to a future exchange, according to
contractual arrangement, of one asset for another. The instrument, which
is a contract, may be tradable and have a market value. Among derivative
instruments are options (on currencies, interest rates, commodities, or
indices), traded financial futures, warranties, and arrangements such as
currency and interest rate swaps.