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.

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.

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

References in periodicals archive ?

Moreover, she argues that the core of causation is derivativeness, which is as neglected now as when she wrote.

American Catholic Philosophical Quarterly: Vol. 81, No. 1 Winter 2007

To go down this path (and some reviewers have) leaves us with little else to say about the book other than that it highlights in a readable, fast-paced way the centrally important issue of overconsumption, but is marked by bland derivativeness, simplism and a cavalier approach to conventions of evidence.

Old for new?

Facts for Visitors takes a perverse pleasure in teetering on the boundary between outright derivativeness and coy experimentation.

Facts for Visitors

179-84; TE, iv, 109) The smear against Philips's 'pilfer'd Pastorals' repeats the accusation of derivativeness originally advanced in the Guardian, no.

Pope and plagiarism

Textual "derivativeness," and posture of deference to the earlier poet, also serve to minimize poetic ego.

Authorship in Sufi poetry

A welcome change from the derivativeness of Amy and Aperghis, Bacri's First Suite for Violoncello Solo, op.

Instrumental music

Obviously worried about the derivativeness of talk TV, Paramount's brave syndication arm is giving us a TV gabber who certainly should be distinguishable.

TV's drab gab

Optimistic by nature, however, I have always held that not even the archness, the derivativeness, the fundamental unseriousness of postmodern art can prevent that art from having, like any other, its master practitioners.

Superior soap opera

However, for any experienced student of South African literature, the novel will disappoint by its derivativeness and predictability.

Eyes of the Sky

In any event, the charges both of superficiality and of derivativeness seem less and less tenable after, say, 1966, the year of American Scenes, the most visibly "un-English" of Tomlinson's twelve major collections.