Derivative security

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Derivative security

A financial security such as an option or future whose value is derived in part from the value and characteristics of another security, the underlying asset.

Derivative Security

Futures, forwards, options, and other securities except for regular stocks and bonds. The value of nearly all derivatives are based on an underlying asset, whether that is a stock, bond, currency, index, or something else entirely. Derivative securities may be traded on an exchange or over-the-counter. Derivatives are often traded as speculative investments or to reduce the risk of one's other positions. Prominent derivative exchanges include the Chicago Mercantile Exchange and Euronext LIFFE.
References in periodicals archive ?
The winners of the corresponding derivatives contracts shall provide a definitive guarantee for an amount of 5% of the tender base budget of each derivative contract.
At our company we entered into a derivative contract to protect our export receivables from currency rate movements.
MANAMA: The launch of the first template for an over-the-counter Islamic derivative contract is "imminent" and will encourage more companies to hedge their risks, an executive at a bank involved in its creation said yesterday.
Foreign exchange or forex derivative contract ( FDC) basically means a financial transaction or an arrangement whose value is derived from price movement in one or more underlying assets
The policy, a derivative contract based on a rainfall index, was taken out by Rome-based United Nations World Food Programme for its operations in Ethiopia.
Siems, a senior economist at the Federal Reserve Bank of Dallas, claims that the Greek philosopher Thales created the first known derivative contract roughly 2,500 years ago.
Kansai Electric Power and Osaka Gas said they will examine the feasibility of the derivative contract at a new company they will set up in January.
Since the first weather derivative contract was written two years ago, that market has grown to $5 billion.
To the extent that settlement values under derivatives contracts are largely contingent, which is often the case throughout the life of a derivative contract, current accounting standards do not require settlement values to be reflected in firms' balance sheets.
Global Banking News-January 23, 2013--Mussari quits Monte dei Paschi over derivative contract approval(C)2013 ENPublishing - http://www.
Issues of trust preferred stock may not be included in tier 1 capital if they are covered by a derivative contract that defeats the cash-conserving purpose of the deferral mechanism on the trust preferred stock.