![]() ![]() What it comes to software tools, it seems like simple tools that do their job well end up more successful in comparison to tools that try to do too many different things. That way you can lock in the current price of oranges, so when your oranges are ready you can sell them at the price you locked in.įinancial derivatives are older than written language.įinancial derivatives are the most popular use-case of currency. ![]() You could use a financial derivative to hedge this risk. ![]() If you are a farmer who is growing orange fruit trees, there is a lot of risk for you if the price of orange fruits should drop before you are ready to harvest. The same way you can combine the chemical elements to produce all possible chemicals, you can combine financial derivatives to create any financial portfolio. The chemical elements are to chemistry what financial derivatives are to finance. The same way you can combine the primary colors to produce all possible colors, you can combine financial derivatives to create any financial portfolio. Primary colors are to colors what financial derivatives are to finance. A financial derivative is the most basic financial instrument.
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