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This study aims to succinctly present the legal and financial nature of futures contracts and swaps as part of derivative financial instruments, with the hope that it will meet the needs of businesses.
Derivative financial instruments provide companies with opportunities to manage risk and generate income from favorable price movements. However, they should be utilized by informed investors who are aware of the financial conditions, legal boundaries, and the magnitude and nature of the risks involved. This article attempts to outline the vast world of derivative financial instruments, presenting an objective view of the benefits and potential risks associated with their use. The goal is to articulate, in accessible language, the essence of these instruments as an exceptionally effective means of protection against various types of risks that businesses face daily in today's complex and competitive economic environment.
Keywords
futures contracts, swap
