What are the main types of financial derivatives, and how are they used for risk management and speculation in financial markets?

**Financial derivatives** come in various forms and serve different purposes in financial markets. Here are the main types:

1. **Futures**: Contracts to buy/sell assets at a predetermined price on a future date. Used for hedging and speculation.
2. **Options**: Provide the right (not obligation) to buy/sell an asset at a specific price. Used for risk management and leverage.
3. **Swaps**: Agreements to exchange cash flows based on interest rates, currencies, or other variables. Used for risk management and customized exposure.
4. **Forwards**: Similar to futures but traded over-the-counter (OTC). Used for customized contracts and risk management¹²³. 📊🌐