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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Acquisitions that utilize excess capacity may establish a cost advantage for the firm while those that develop dynamic capabilities may establish a differentation advantage.
In rats, markers of sexual differentation appear late in gestation (53).
The vertical dimension characterizes higher-to-lower levels of abstraction, while the horizontal structure characterizes the degree of differentation at a given level (e.g.
Genic identity geographic differentation of trophically dichotomus Ilyodon (Teleostei: Goodeidae).
Origin, Diffusion and Differentation. University of New Mexico Press, Albuquerque.
(For example, the gendered approach might have been explained by her differentation perspective, and poststructuralist feminism might have been explored through her fragmentation perspective on organizational culture.)
Genetic differentation of the tephritid fly Urophora cardui in Europe as evidence for its biogeographical history.
Differentation by preparative continuous free flow-isoelectric focusing of cyclosporin A inhibitable peptidyl-prolyl cis/trans isomerase of human erythrocytes.
Extensive ornamentation is an aid to increased differentation between the parts, and a judicious use of tempo rubato by the soloist makes it very easy for a listener to perceive in a performance one of the most important aspects of all successful chamber-music-making: namely that the participants may choose wholly individual routes to reach the same common goal.
Even more striking is the similarity between the structure of Jungian terminology and Kant's differentation, in 'Von dem transzendentalen Ideal', of 'das Urbild' or 'prototypon' from the 'Kopie' or 'ectypon':(56)
The differentation of literary discourse from other discourses, originally
Morgan, told industry executives gathered here for Impact'95 that while this lagging performance has dampened the enthusiasm of the investment community, it has spurred product differentation.

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