![]() ![]() One of the earliest examples of what we would today consider financial derivatives was in ancient Greece and involved the philosopher Thales, a student of Aristotle. Working in a similar way to an insurance policy, derivatives are a valuable part of many investor’s portfolios. Futures contracts, CFDs, options contracts and so on are all superb ways of mitigating losses that can occur as a result of downturns in the market or an asset’s price. You’ll have probably heard the term derivatives used in conjunction with risk hedging. You’ll have almost certainly heard the term in the wake of the 2008 global economic downturn when these financial instruments were often accused as being one of main the causes of the crisis. The term itself, however, is something that came about in the 1970s and derivatives have been a semi-regular feature on the news and in financial pages since the 1980s, sometimes with a lot of negative press. ![]() US30 US Wall Street 30 (USA 30, Dow Jones)ĭespite being generally considered to be a modern trading tool, financial derivatives have, in their essence, been around for a very long time indeed.
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