derivative

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Derivative

A financial contract whose value is based on, or "derived" from, a traditional security (such as a stock or bond), an asset (such as a commodity), or a market index.

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.

derivative

An asset that derives its value from another asset. For example, a call option on the stock of Coca-Cola is a derivative security that obtains value from the shares of Coca-Cola that can be purchased with the call option. Call options, put options, convertible bonds, futures contracts, and convertible preferred stock are examples of derivatives. A derivative can be either a risky or low-risk investment, depending upon the type of derivative and how it is used. See also underlying asset.

Derivative.

Derivatives are financial products, such as futures contracts, options, and mortgage-backed securities. Most of derivatives' value is based on the value of an underlying security, commodity, or other financial instrument.

For example, the changing value of a crude oil futures contract depends primarily on the upward or downward movement of oil prices.

An equity option's value is determined by the relationship between its strike price and the value of the underlying stock, the time until expiration, and the stock's volatility.

Certain investors, called hedgers, are interested in the underlying instrument. For example, a baking company might buy wheat futures to help estimate the cost of producing its bread in the months to come.

Other investors, called speculators, are concerned with the profit to be made by buying and selling the contract at the most opportune time. Listed derivatives are traded on organized exchanges or markets. Other derivatives are traded over-the-counter (OTC) and in private transactions.

derivative

a financial instrument such as an OPTION or SWAP whose value is derived from some other financial asset (for example, a STOCK or SHARE) or indices (for example, a price index for a commodity such as cocoa). Derivatives are traded on the FORWARD MARKETS and are used by businesses and dealers to ‘hedge’ against future movements in share, commodity etc. prices and by speculators seeking to secure windfall profits. See LONDON INTERNATIONAL FINANCIAL FUTURES EXCHANGE (LIFFE), EUREX.

derivative

a financial instrument such as an OPTION or SWAP the value of which is derived from some other financial asset (for example, a STOCK or SHARE) or indices (for example, a price index for a commodity such as cocoa). Derivatives are traded on the FUTURES MARKETS and are used by businesses and dealers to ‘hedge’ against future movements in share, commodity, etc., prices and by speculators seeking to secure windfall profits. See LONDON INTERNATIONAL FINANCIAL FUTURES EXCHANGE (LIFFE), STOCK EXCHANGE.
References in periodicals archive ?
Second, the continuity of the first derivative follows from the fact that at the boundary C, the GMDB owner should be indifferent between being in the fixed fund or being in the variable fund.
Let f(x) have first derivative in the interval I, then the order of convergence of the Newton-five [alpha] method defined by (4) is five.
The variation of maximum value of first derivative is according with the variation of expression [[lambda].
The 787-9, a larger variant of the airplane, will be the first derivative of the baseline 787 with delivery planned for early 2012.
In June 2004, the Company acquired First Derivative Systems, Inc.
One reason this may be a difficult earnings season is that the earnings growth rate is decelerating, and many larger funds use the first derivative (i.
This special PVD source compliments our recently announced Flat Magnetron and our well-developed S-Gun sources, strengthening the portfolio of thin film deposition capabilities available in the Endeavor(TM) and Oncore(TM) cluster systems," said Andy Clarke, Tegal's Director of 300-mm PVD Technology, and the founder of First Derivative Systems, acquired by Tegal earlier this year.
7 million for IPR&D related to the purchase of First Derivative Systems, Inc.
Mandipropamid, the first derivative of the chemical class of mandelamide fungicides, sets a new standard in performance: locking rapidly and tightly to the leaf's waxy layer, it provides a highly effective, weatherproof and long-lasting barrier to diseases.
com, an electronic marketplace that lets online investors trade innovative financial instruments based on economic risks and opportunities in their daily lives, has opened its virtual doors, becoming the nation's first derivative exchange for both individual investors and institutional traders.
He assisted in managing the first forward trading operations in the region and contributed to structuring the first derivative fund in the GCC.