What Are Derivative Contracts. Derivative contracts are instruments that derive their values from the values of the underlying instruments upon which they are based.

Definitions of commonly used terms like futures contracts, futures options, swaps which are commonplace in the world of derivatives.

Futures or futures contracts call for the purchase or sale of a financial or real asset at some future date, but at a price which is fixed today.

In the US, the 2 main futures exchanges are the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME). The CBOT is well known for its US Treasury notes and bonds futures contracts while the CME is commonly associated with the S&P500 and E-mini S&P500 futures contracts.

Learn how a fund manager hedges his position in stocks using futures contracts so as to minimize his risk to uncertainties or surprises.

The major factors to consider for a newcomer in choosing a futures contract to swing or day trade.

Major factors to consider for a newcomer to the futures markets in choosing a futures contract to trade.