Derivatives are financial contracts whose prices are derived from an underlying asset (e.g. shares, bonds, indices or currencies).
These so-called "underlyings" are subject to changing market prices. Derivatives make it possible to uncouple such market price risks from the underlying and trade them separately.
Derivatives can basically be broken down into two groups: unconditional (futures, forwards etc.) and conditional (options) forward transactions. Derivatives in so-called certificate form include warrants and structured products.