An examination on synthetic securities

The developments in the financial markets have provided market growth in volume yet given rise to risk. Due to the studies made within financial engineering to minimize or eliminate the risks of financial products, new instruments referred as derived products, credit-derived products which have been improved to avoid the risks of these derived products and structured security have been improved.Products improved to avoid risk, not only transfer the risk to the part that aims to get high profit by taking risk, but they are also more complicated than the traditional financial products. These products are credit-based securities so as to transfer the credit risk in particular. Enabling to transfer credit risk, they have a big role in the improvement of markets.This study deals primarily with markets, risk, securitization and financial engineering and mentions about financial derived products that are developed for the need to avoid risk, credit-derived products and structured securities and finally analyzes the structure of synthetic securities that is a part of structured securities.