What Are Derivatives?
The mental model before any product detail — what derived value means, why hedgers and risk-takers both exist, the four families side by side, and what leverage, notional and counterparty risk actually do.
Start here
What does it mean for a contract to derive its value?
Start the first lessonUnit 1 What "Derived" Means
- What does it mean for a contract to derive its value?
- Why did a farmer and a miller invent the first derivative?
- Why does a market need both hedgers and risk-takers?
- How can a contract be worth something when it costs nothing to enter?
Practice Check · Unit 1 A short check · cannot be failed Start
Unit 2 The Four Families
- What exactly is a forward contract?
- What does an exchange change about a forward?
- What do you actually buy when you buy an option?
- What are swaps and CFDs, and why do they exist?
Practice Check · Unit 2 A short check · cannot be failed Start
Unit 3 Leverage & Counterparty Risk
- Why do "quadrillions in derivatives" headlines mislead?
- Where does leverage actually come from?
- What happens if the other side doesn't pay?
- What does a clearing house actually do?
Practice Check · Unit 3 A short check · cannot be failed Start
Unit 4 When Derivatives Go Wrong
- How did one trader destroy a 233-year-old bank?
- How did two Nobel laureates lose $4.6 billion?
- How did insurance on mortgages nearly end the financial system?
- What are derivatives? — course checkpoint
Practice Check · Unit 4 A short check · cannot be failed Start
Last Course exam
One exam, the whole course Unlocks when you have read all 16 lessons
Passing it earns the course certificate. It also counts toward the Trader track (course 5 of 9): pass every course exam in a track to earn its track certificate.