derivatives mk, unit 18. watch the video and take notes what is a derivative? what is the...
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![Page 1: Derivatives MK, Unit 18. Watch the video and take notes What is a derivative? What is the underlying? How can derivatives be used? Why are they dangerous?](https://reader036.vdocument.in/reader036/viewer/2022082713/5697c0151a28abf838ccdd6f/html5/thumbnails/1.jpg)
Derivatives
MK, Unit 18
![Page 2: Derivatives MK, Unit 18. Watch the video and take notes What is a derivative? What is the underlying? How can derivatives be used? Why are they dangerous?](https://reader036.vdocument.in/reader036/viewer/2022082713/5697c0151a28abf838ccdd6f/html5/thumbnails/2.jpg)
Watch the video and take notes
What is a derivative? What is the underlying? How can derivatives be used? Why are they dangerous? What are the 4 types of derivatives?
https://www.youtube.com/watch?v=yTxxSTXg404 (kanjohvideo: Introduction to Financial Derivatives)
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Make slides for a presentation on derivatives with the help of the reading on the handout.
Include the following topics:
Definition Where are they traded? What are they used for? Types of derivatives
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Possible slides:
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Definition
derivative: financial instruments whose price is derived from / dependent upon the value of an underlying asset.
derive (derives, deriving, derived): to obtain sg from sg else
When buying/selling a derivative you buy/sell the right to do something (buy a commodity, pay in a different currency, etc.)
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Traded
Over-the-counter (OTC): bigger, less safe
Stock exchanges: smaller, more secure due to clearing houses
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Used for:
hedging: protection against price changes (“insurance”)
speculation: buying or selling assets, hoping to make a profit in the future (“betting”)
“Financial weapons of mass destruction”? (Warren Buffett)
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Main types of derivatives:
futures forwards options swaps
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Watch and take notes
Futures contracts https://www.youtube.com/watch?v=FLGRPY
AtReo (graphitishow: What are Derivatives?)
Now fill in the gaps on your handout