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Another term for financial market instrument is a derivative. It means it derives its value from something else. i.e. stock options derive there value from stocks.

If you are investing avoid them. There is a significant amount of hidden leverage in derivatives.

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Q: What is financial market instrument?
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What is financial instrument?

Another term for financial market instrument is a derivative. It means it derives its value from something else. i.e. stock options derive there value from stocks. If you are investing avoid them. There is a significant amount of hidden leverage in derivatives.


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The spot market is a market place where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. It may also refer as a physical market of commodities and cash market of equities. The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately. Buyers and sellers create the spot price by posting their buy and sell orders. In liquid markets, the spot price may change by the second, as orders get filled and new ones enter the marketplace.


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