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 ?
In his book American-Style Derivatives: Valuation and Computation, Jerome Detemple presents the subject areas of financial engineering and investment finance with "an extensive treatment of the theoretical and computational aspects of derivative securities pricing" (p.
In 1991, Section 16(b) was changed to give options (and other derivatives) the same status as stock; the SEC recognized "that holding derivative securities is functionally equivalent to holding the underlying equity securities for purposes of Section 16(b), since the value of the derivative securities is a function of or related to the value of the underlying equity security.
Relatively new businesses such as Internet services, energy marketing, and derivative securities, force action on as-yet-undefined information requirements.
NEW YORK, April 29 /PRNewswire/ -- The American Stock Exchange today announced the following key staff promotions within the Derivative Securities Division of the Exchange:
The FFIEC proposes a quantitative measure for determining which derivative securities are high risk and unsuitable as investments by depository institutions.
While 100% of this exposure is hedged with a standard LIBOR-based swap and constant maturity swap, the district is now increasingly vulnerable to the inherent risks of derivative securities and auction-rate products.
WASHINGTON, May 16 /PRNewswire/ -- Nearly a third of the community banks that have purchased derivative securities in the past think they will not make similar investments in the future, says a national survey of more than 800 banks by Grant Thornton LLP, a major accounting and management consulting firm with offices here.
For the past two decades, the American Stock Exchange has formed a foundation for creating and listing some of the most innovative option and equity derivative products, and the next twenty years will continue to fortify the Exchange's dual role in providing a marketplace for both stocks and derivative securities," said Syron.
This settlement puts the derivative securities litigation behind Tripath at minimal expense," said Jeffrey L.
In addition, the county's pooled investments include about $736 million in structured notes and derivative securities, a high 22% of the total portfolio.
The Bank is a recognized leader for trust services in several debt products, including corporate and municipal debt, mortgage-backed and asset-backed securities, derivative securities services and international debt offerings.
Los Angeles County's investment pool currently has voluntary participants representing about 37% of its assets, holds no derivative securities, and only is minimally leveraged.