Derivatives Markets

          Derivatives markets facilitate the purchase and sale of derivation securities, which are financial contracts that derive their values from underlying securities or from other related financial assets. A familiar form of derivative security is the opportunity to buy or sell a corporation's equity securities for a specified price and within a certain amount of time. Derivative securities may be used to speculate on the future price direction of the underlying financial assets, or to reduce price risk associated with holding the underlying financial assets. Organized exchanges handle standardized derivative security contracts, while negotiated contracts are handled in electronic markets often involving commercial banks or other financial institutions.