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 ?
The firm also said that it was planning to dispute certain claims arising from its financial derivative instruments in US courts.
The BFX educational workshops are specifically designed to enable university students to increase their knowledge and understanding of how modern electronic financial derivative exchanges function.
As requested, this report (1) identifies and evaluates how financial derivatives can be used to avoid or evade tax liability or achieve differing tax results in economically similar situations, (2) evaluates Internal Revenue Service (IRS) actions to address the tax effects of investments in financial derivatives through guidance, and (3) evaluates IRS actions to identify financial derivative products and trends through information from other agencies.
The sudden rise in gold prices triggered a collapse in Ashanti's financial derivative program, which made the company liable for more than half a billion dollars in new debt, in addition to preexisting debt.
12, the Twenty Fourth Resolution of Modifications to the Miscellaneous Tax Resolution for 2000 and its annexes 5,7 and 14 amended and added rules related to the definition of financial derivative transactions of debt, the elimination of the withholding obligations of financial intermediaries that participate in the sale of shares by Mexican or foreign legal entities in authorized brokerage houses, and other provisions related to the payment of interest and calculation of the consumption tax in the sale of vehicles, jewelry and gold.
In fact, the language of financial derivatives recognizes that risks are exchanged, rather than simply transferred: The two parties to a financial derivative usually are referred to as "counterparties," rather than as cedent and receiver.
Wall Street's "rocket scientists" continually are creating new, complex, sophisticated financial derivative products.
Since their inception in the early 1970s, financial derivative instruments have mushroomed very quickly from simple financial futures to a wide variety of exotic and complicated securities.
Financial derivative investments; an introduction to structured products.
Financial derivative contracts are fundamentally different from agricultural futures owing to the nature of the underlying asset from which the derivative contract is "derived.
Radar Logic will publish a daily price index, matching more closely the existing financial derivative markets.
The AHL Diversified Programme is designed to achieve medium-term capital growth by trading a diversified portfolio of stock index, bond, currency, short-term interest rate and commodity (energy, metal and agricultural) futures contracts and other financial derivative instruments.

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