Derivatives Decoded | Episode 1: Futures vs Options Explained

Derivatives can seem complex, but they play a major role in financial markets. In the first episode of ETMarkets’ explainer series, we break down futures and options in simple terms. How do they work, and why can they lead to such big gains and losses? We also look at how traders, investors, businesses and institutions use derivatives for hedging, speculation and leverage. If you are new to derivatives, this episode offers a simple introduction to understanding how these instruments work.