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What are derivative investments?



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A derivative is a contractual agreement which derives its value from an underlying financial product or asset. The underlying assets used in derivatives include interest rates, stocks, bonds, foreign exchange currencies, commodities and credit. Derivatives are traded either over-the-counter (OTC) or on an exchange and are used for a variety of reasons, by primarily sophisticated investors and institutions, including for hedging, speculation, arbitrage, leverage and portfolio management purposes.

Visit to learn about derivatives and other financial topics. Speak with a registered financial representative or tax professional for advice tailored to your personal financial needs and financial situation.

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