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 ?
One of the measures that is being discussed is a strategy that would allow the two parties in a derivative contract to verify the deal every fortnight or month and take action depending upon the reaction of the market.
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.
However, the derivative contract can decide the opportunity of a requirement.
Deposits and Guarantees required: Tenderers derivative contracts in the framework agreement submitted the most economically advantageous tender must certify the establishment of a definitive guarantee of 5% of the derivative contract budget, excluding VAT.
In the LCR framework, the previous treatment of reporting expected cash flows for each derivative contract in gross amounts has been revised.
Under the new policy, cash inflows and outflows from each derivatives contract will now be recognized on a net basis consistent with valuation methodologies for derivatives contracts and the Basel III LCR framework, unlike the previous treatment of reporting expected cash flows for each derivative contract in gross amounts.
A spread is a difference between the bid and the ask price of a security or asset and a swap is a derivative contract from which two parties exchange financial instruments.
• Indemnity period of derivative contract: January 17, 2013 - October 31, 2013
For those uninitiated--an ILW is a type of reinsurance or derivative contract through which one party will purchase protection for an event, based on the total loss to the entire insurance industry rather than their own losses.
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