A derivative market is a totality of derivatives (futures, forwards, options, swaps and other) that have been created over the world. Some of the derivatives are standardized and are traded on Exchanges while others are created only between two parties and are traded on OTC market (standardized derivatives also can be traded on OTC market).
A total derivative market is huge and now has a serious impact on overall economy. Derivatives are very useful investment instrument for hedging because allows controlling investment risk but also it became an object of speculation. The variety of derivatives is unlimited and they becoming harder to understand and to control creating more risks for the financial market stability.
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