Trading in derivatives on exchanges and in the
over-the-counter market has evolved from contracts with the delivery of assets to trading in derivatives for innovative instruments - cryptocurrencies.
The historical development of derivatives trading was formed with certain interruptions on domestic exchange markets.
Modern trading in derivatives takes place on universal exchanges, which are electronic exchange platforms with the spread of the well-known trading technology - Internet trading.
Currently, derivatives on exchanges are no longer used to deliver underlying assets that are the object of trade, but are used mainly as contracts for the purchase and sale of prices for underlying assets. This makes modern exchange trading in derivatives financial flows of investments.
There are significant differences in the maturity levels of organized exchanges due to the types of derivative contracts traded on them. For example, countries with market economies have universal electronic exchanges that trade futures, options, and swaps.
Commodity exchanges in countries with economies in transition operate mainly with spot and
forward contracts that involve the delivery of physical assets. These commodity exchanges are characterized by narrow specialization. Clearing settlements and trading technology on such exchanges are underdeveloped.
By their economic nature, derivatives have, firstly, a term feature, and secondly, a financial side of execution - without the delivery of physical assets.
The emergence of derivatives has changed the economic structure of exchange contracts. The reason was the standardization of the parameters of exchange-traded futures contracts. Exchanges have introduced clearing settlements to guarantee the execution of exchange-traded futures contracts. The success of these mechanisms depends on the liquidity of exchange-traded derivatives trading, namely in the range between the opening and closing of positions in exchange-traded derivatives.
Liquidity of exchange trading is achieved on the
basis of standardization of the parameters of exchange-traded contracts.
