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 ?
Furthermore, the language of the proposal is so broad that it sweeps in instruments which finance the secondary mortgage market, the state and local government obligation market and derivatives instruments used by businesses and financial institutions to hedge against interest rate and currency risk.
The exposure draft would require tabular disclosure of notional and fair value amounts of derivatives instruments and the gains and losses on derivatives instruments and related hedged items.
The increase in non-interest income was driven by a significant reduction in losses on trading securities as compared to 2004, mainly as a result of lower losses in the value of the Company's derivatives instruments undertaken for risk management purposes.
FpML is the freely licensed business information exchange standard for electronic dealing and processing of privately negotiated financial derivatives instruments.
2) Corrections to the fair value calculations of certain embedded derivatives instruments.
FpML is a business information exchange standard for electronic dealing and processing of financial derivatives instruments.
Bear Stearns has signed a letter of intent for exclusive rights to employ Longitude's Parimutuel Digital Call Auction(TM) (PDCA(TM)) technology to create derivatives instruments based on corporate performance and equity risk measures, such as reported corporate earnings, revenues, equity price volatility, and other risks important to equity market participants.
GL TRADE's flexible architecture integrates well with our trade matching and clearing systems, and offers the ability to list new futures, options, swaps and other derivatives instruments to the traders' screen in real-time," said Richard Jaycobs, CEO of onExchange.
a provider of solutions for the worldwide capital markets, today announced partnerships whereby the two banks will create new derivatives instruments based on economic statistics using Longitude's Parimutuel Digital Call Auction(TM) (PDCA(TM)) technology.
Financial products Markup Language is a standard for defining business information for the electronic trading and processing of financial derivatives instruments.
Sparks and onExchange are helping companies through the evaluation and research process to determine the advantages of using derivatives instruments to integrate risk management solutions into their businesses," said Richard Jaycobs, CEO of onExchange(SM).