An energy derivative is a contract based on an underlying asset in the field of energy, including oil, natural gas, coal or alternative energies. A derivative is a contract, either between two parties or offered as an exchange-traded security, whose value is "derived" from the value of one or more underlying assets. Derivatives are considered more complicated than straightforward securities. They include forward contracts, futures, options and swaps. Derivatives can be purchased on nearly any asset, including commodities in the energy field. An energy derivative is just one type of complicated contract that may be used to bet on the value of an energy source in the future.

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