Widening the retail investment arena with derivatives

structured products

Derivatives were the preserve of institutional investors but now retail investors can access these assets via the internet or over the phone, allowing them new ways to gain exposure to traditional assets

A derivative is a contract or instrument that is derived from and based upon something else. The something else is usually called the underlying and may be an asset such as an equity; an index such as the Dow Jones; or a commodity, for example Brent crude oil or a currency such as the Euro. A derivative gives the investor exposure to the underlying without having to physically own it. For many retail investors, owning commodities on a direct basis is not practical or affordable. For example, to buy a kilobar - the most widely traded small gold bar - would cost just over $20,000 at current ...