The profit or loss of party B is the same for him as actually owning the underlying asset.

Allows the buyer to "swing" the price of the underlying asset.

In many cases, the costs associated with managing these lands can be significantly more than the value of the underlying asset.

The amount and units of the underlying asset per contract.

Derivatives allow risk related to the price of the underlying asset to be transferred from one party to another.

They are usually more volatile than their underlying asset.

Here, the degree of correlation between the underlying asset and the hedge is not high.

This is a clear examples of how prices are detached from actual need for the underlying asset.

Also, they lead to complete markets where hedging can be based only on the underlying asset.

Derivatives are transactions whose value is based on an underlying asset.