The role of derivatives in the evolution of structured products

Derivatives markets have been around for many decades, beginning with exchange-traded call and put options in equities, and then onto fixed income swaps and beyond. This development came out of traders wanting to either hedge away risk or to gain and leverage exposure. In finance it is the coming together of agents with different views and objectives that makes for a liquid and active market. Because equity options are traded directly, they only need enough liquidity and the presence of market