Derivatives Trading

In simple terms, a derivative is a financial contract whose value comes from something else (an "underlying asset"), like stocks, oil, or currencies, essentially a bet or agreement on that asset's future price. They're like insurance or bets: a farmer uses them to lock in a future price for his crop (hedging), while a trader uses them to speculate (bet) on price changes, offering leverage (big gains/losses with small money) and risk management tools.