One of the more popular forms of investment vehicles are financial instruments called derivatives. Derivatives do not have their own value, but derive value from an underlying asset.
In very simple terms a derivative’s profitability is based on whether the value of the underlying security, which might be a share, bond or index, will increase or decrease by a specific date.
Let's look at some of the different forms of derivatives:
The ASX has a great explanation on the differences between options and warrants which is worth reading before you expore further.