Derivatives are financial instruments that derive their value from something else, such as an underlying asset, group of assets, or benchmark. In the stock market, the most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. Derivatives can be used for a variety of purposes, including hedging a position, speculating on the directional movement of an underlying asset, or leveraging holdings. They can be traded over-the-counter (OTC) or on exchanges like the Chicago Mercantile Exchange. Derivatives can be a convenient way to achieve financial goals, such as hedging against exposure to commodities. However, derivatives are complex financial contracts and are generally considered a form of advanced investing. They involve significant complexity and are not generally used as simple buy-low-sell-high or buy-and-hold investments.