STRATEGIES
Derivatives (Financial Derivatives)
Definition
Derivatives are financial contracts whose value derives from underlying assets like cryptocurrencies, stocks, or commodities. In DeFi, they enable advanced trading strategies and risk management.
Example
Example
Options on ETH, perpetual futures, and synthetic assets are all derivatives that let you trade price exposure without owning the underlying ETH.
Risks to Consider
Risks
- Complexity
- Counterparty risk
- Liquidity risk
- Leverage amplification