Two Real World Examples OR Events of Derivatives Finance, SPSS Essay

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Two Real-World Examples or Events of Derivatives
A financial derivative is a financial asset whose value is derived from changes in another asset, known as an underlying asset (Fernando). The underlying asset can be financial such as a stock or a bond), or non-financial such as the financial future on oil or gold. Derivative instruments are useful in hedging/. They are also useful in arbitrage where there is a cross-trading strategy to get positive net profits when there are market inefficiencies such as in the currency market. Buying and selling options and currency swaps are examples of derivative trading.
An option is a financial derivative that involves a contract for the purchase or sale of an underlying asset, which grants the right to the buyer of the option to buy or sell the underlying asset agreed at an agreed date agreed future (Fernando). On October 6th 2020, an option trader placed a $3.36 million bet that Tesla’s stock would rise, th...