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    Traditional financial instrument and a derivative financial

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    What are the main distinctions between a traditional financial instrument and a derivative financial instrument?

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    Here is some info for you regarding traditional financial instruments and derivatives:

    Financial instruments or securities are contracts that package capital in a tradeable form. Financial markets are the "places" in which the buyers and sellers of financial instruments meet. Sometimes this occurs in an actual physical location such as the New York Stock Exchange, within a virtual space such as the NASDAQ or in a decentralized fashion such as certain over-the-counter markets.

    What are sometimes called underlying securities fall into three broad categories

    * Equities - Sometimes ...