Posted by admin on Sunday, January 17, 2016

Derivative: a contract that derives its value from the performance of an underlying entity, which can be an asset, index, or interest rate. A derivatives value is measured by fluctuations in those underlying assets – or what the contract is ‘derived‘ from. Underlying assets most often include stocks, bonds, commodities, currencies, interest rates and/or market indexes.

Derivatives can include options, futures, forwards, swaps, and variants of these such as credit default swaps and synthetic collateralized debt obligations.

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