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What are the common Features of Cash and Derivatives Markets?

The cash and derivatives markets are usually closely linked, despite being independent of each other - with individual supply and demand structures.

Reason for close relationship:
Trades concluded on both markets are based on identical products. These are generally referred to as "underlying instruments", and include equities, bonds and other financial instruments.

Distinctive feature:
it is also possible that forward transactions refer to other forward transactions that in turn are dependent on cash transactions. For instance, Options on Fixed Income Futures traded on Eurex Exchange are an example.

The price determination on the derivatives market and on the cash market are closely related.

Mutual influence of the price formation:

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