Advantages of Exchange-Traded Derivatives

Exchange-traded derivatives are financial contracts that are standardized and traded on regulated exchanges. These instruments provide a way to hedge risks or speculate on price movements of underlying assets. One common type of exchange-traded derivative is the futures contract. Futures contracts obligate the buyer to purchase, and the seller to sell, an asset at a predetermined future date and price. Understanding the key characteristics and advantages of exchange-traded derivatives is essential for any investor looking to navigate the derivatives market.

Which of the following statements accurately describes an advantage of exchange-traded derivatives compared to over-the-counter derivatives?