What Are Swaps? The Short Explanation: A swap is a type of a derivative contract between two parties to exchange financial instruments, such as: Interest rates, currencies, cashsflows, derivatives or securities. The instrument used in a Swap can be almost anything, but most swaps involve cash based on a notional [...]
What Are Forwards? The Short Explanation: Forwards are a derivative instrument, much like Futures, meaning they are an agreement between two parties to buy or sell an asset for a predetermined price at a future date. Where Forwards differ from Futures though, is that they are customisable and not traded [...]
What Are Securities? The Short Explanation: The definition of securities tend to have a different meaning all around the world. In the US typically all financial assets that can be traded can be considered as securities. The FCA defines securities differently in the UK. Most common types of securities are [...]
What Are Derivatives? The Short Explanation: A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset(s). These include stocks, indexes, bonds, currencies, interest rates and other commodities. There are different types of derivatives. Most commonly used are futures, forwards, options, [...]
What Are Options? The Short Explanation: Options are a type of a derivative financial contract which gives the option for the holder of the contract to either sell or buy an asset within a specified time frame for a predetermined price. An option that gives the holder of the contract [...]
