A derivatives market is any market for a derivative,
that is a contract which specifies the right or obligation to receive
or deliver future cash flows based on some future event such as
the price of an independent security or the performance of an index.
Derivatives markets can be standardized (many users trading fungible
contracts, typically on an exchange) or non-standardized (where
derivitives are customized for the user by a trading desk - the
over-the-counter market). One derivatives market is for standardized
options, a market where parties can buy or sell, call
options on a secondary
market. Non-standardized derivatives instruments,such as naked
warrants issued directly by financial
institutions to a secondary market, also exist.
Other derivative markets include those for Interest Rate Swaps, Credit Default Swaps and Options and forwards on foreign exchange.