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 stock options, a market
where parties can buy or sell, call or put 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.