Derivatives
LexInter | January 21, 2006 | 0 Comments

Derivatives

Operation that is derived from another operation and through which the counterparty risk is ceded.

Derivative transactions were originally a means of hedging risks linked to commercial transactions (for example changes in currencies and exchange risk for the exporter or importer in the event of deferred payment).

They have become speculative transactions where the credit derivative is created as a financial product, the derivative , which is traded on a market.

The dissociation between the derivative and an underlying transaction posed the problem of the validity of these transactions with regard to the legislation and jurisprudence on gambling and betting. The legislator validated forward transactions.

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