 derivative contract

A derivative, derivatives or derivative contracts are financial instruments whose value derives from the value and characteristics of underlying products. The underlying assets (often referred to as the "underlying" or "underlier") are extremely varied and range from commodities, currencies and indices to individual shares. The main feature of a derivative is that it allows the user to take an exposure in relation to the underlying asset without actually requiring a direct investment in it. Derivatives include futures, options and swaps.For UK corporation tax purposes, derivative contracts are defined as contracts that satisfy the conditions contained in Schedule 26 to the Finance Act 2002.Related linksUSAA contract that operates and is valued by reference to the value or performance of an underlying asset, entity, rate, index or instrument. Underlying assets range from commodities, currencies, debt obligations and indices to individual equity shares and baskets of equities. Derivatives allow the user to take on exposure to an underlying asset without actually requiring a direct investment in the asset. Derivatives include futures, options and swaps.Related terms
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
Look at other dictionaries:
Exchangetraded derivative contract — Exchange traded derivative contracts standardized derivative contracts (e.g. futures contracts and options) that are transacted on an organized futures exchange.These contracts can include futures , call and put . Part of the name of these… … Wikipedia
Derivative (finance) — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
derivative — de·riv·a·tive 1 /də ri və tiv/ n: a contract or security that derives its value from that of an underlying asset (as another security) or from the value of a rate (as of interest or currency exchange) or index of asset value (as a stock index) ◇… … Law dictionary
derivative — [də riv′ə tiv] adj. [ME derivatif < LL derivativus < L derivatus, pp. of derivare: see DERIVE] 1. derived 2. using or taken from other sources; not original 3. of derivation n. 1. something derived 2 … English World dictionary
Derivative (disambiguation) — Derivative, in calculus, is a measurement of how a function changes when the values of its inputs change. Derivative may also refer to: Derivative (finance), a contract whose value is derived from that of other quantities Derivative (chemistry),… … Wikipedia
derivative contracts — A derivative, derivatives or derivative contracts are financial instruments whose value derives from the value and characteristics of underlying products. The underlying assets (often referred to as the underlying or underlier ) are extremely… … Law dictionary
Contract for difference — In finance, a contract for difference (or CFD) is a contract between two parties, typically described as buyer and seller , stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at… … Wikipedia
derivative — An investment vehicle whose value depends on the value of an underlying asset or index. For example, a futures contract for the delivery of gold depends on the value of gold (the underlying asset). A futures option which, upon exercise, delivers… … Financial and business terms
derivative — derivatively, adv. derivativeness, n. /di riv euh tiv/, adj. 1. derived. 2. not original; secondary. n. 3. something derived. 4. Also called derived form. Gram. a form that has undergone derivation from anoth … Universalium
derivative — /dəˈrɪvətɪv / (say duh rivuhtiv) adjective 1. imitative of others. 2. derived. 3. not original or primitive; secondary. –noun 4. something derived or derivative. 5. Grammar a form derived from another: atomic is a derivative of atom. 6. Chemistry … Australian English dictionary