A derivative is a financial product that is derived from another financial product, also known as an underlying asset. This underlying asset can relate to securities such as bonds, shares or other key figures such as interest rates or price trends. Derivatives have no intrinsic value, but are based on the performance of securities or key figures. They are traded through banks or on stock exchanges and are often used to hedge prices, for example by betting on falling share prices. In this way, a loss can be minimized if prices actually fall. If prices rise, profits are of course also reduced. Many companies engage in such hedging transactions, for example in commodities trading.

However, derivatives are often also used to increase returns. This is why their reputation is not exactly positive among some critics of banks and stock exchanges, who describe derivatives as speculative instruments. However you look at it, derivatives have long since established themselves and offer a wide range of options for hedging price losses or increasing returns.

Categories of derivatives

There are unconditional and conditional derivatives. Unconditional derivatives are executed without agreed conditions. These unconditional derivatives include futures, forwards and swaps. Conditional derivatives include options, which may or may not be honored. For example, if a price bet does not materialize, an option can be waived. To benefit from such an option, an option premium must be paid.

The educational offer on the topic of derivatives

In order to better understand derivatives or to exploit their potential, courses are offered by private schools or universities. Depending on the course offered, this type of training provides basic knowledge or in-depth knowledge of this versatile and complex financial instrument. Short seminars and courses are offered as well as longer training courses such as CAS courses (CAS = Certificate of Advanced Studies), which last one semester. In addition to the traditional range of courses, there are numerous training courses, continuing education courses and courses that are offered as online lessons.