Introduction to Derivatives
What a derivative is, why it exists, and who actually uses them.
Lessons
- What Is a Derivative?A contract whose value is derived from something else. The whole idea in one sentence, then unpacked.
- Why Derivatives ExistBorn to let farmers and miners lock in prices — hedging came first, speculation came later.
- Hedgers, Speculators & ArbitrageursThe three players whose opposing motives make the derivatives market work.
- Underlyings, Lot Sizes & ExpiryThe basic plumbing: what a contract is written on, how big it is, and when it dies.
- Leverage: The Core Appeal and DangerControl a large position with little money — the feature that creates fortunes and craters.