If you are not a finance expert, dealing with the subject of derivative products (or, more simply, derivatives) always creates awkwardness. It is like walking into a field whose boundaries and features are not exactly known. One only knows that it is chequered.

This sensation is partly justified; derivative products are complex instruments, intended for professional, or at least advanced, investors, who know how to exploit the numerous opportunities which they offer and, at the same time, are able to assess and correctly handle the related risks, which are considerable.

But also "normal" investors, with a little patience and concentration, can learn the basic elements of the main derivative products on the market.

This is the aim of this investor education guide: accompany the investor through a learning process which, via the comprehension of the fundamental characteristics, the aims and the risks and the individual products, leads to knowledge of the general nature of the main derivative products.

This type of knowledge is useful, not only for raising one’s financial culture, but also for comprehending the use which is made of the derivatives within the sphere of other financial products, at times extremely common among the general public. Therefore, one will be able to understand, for example, what it means when a mutual fund hedges itself against the risk of the performance of a certain share market by means of the conclusion of option agreements. Or one can gain a clear idea of the nature of structured bonds which, alongside the bond component, present derivative components which link the risk-return profile to parameters other than those typical of the bond investment.

This is not sufficient for investing directly. Those who really wish to do so must study more, recalling the golden rule: before investing on complex products, it is necessary to have thorough knowledge of the features and the ways in which they interfere with market performances, generating profits and losses. And this is precisely the case of derivative products.