Definition of Derivative:
Financial markets: Contract to buy or sell an asset or exchange cash, based on a specified condition, event, occurrence, or another contract.
A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets—a benchmark. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset.
The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. These assets are commonly purchased through brokerages.
Mathematics: Measure of the rate of change of a dependent variable with respect to an independent (explanatory) variable.
Synonyms of Derivative
Accountable, Acquired, Alleged, Ascribable, Assignable, Attributable, Attributed, Borrowed, By-product, Charged, Conjugate, Consequent, Consequential, Copied, Credited, Derivable from, Derivation, Derivational, Derived, Descendant, Development, Due, Echoic, Ensuing, Etymologic, Explicable, Final, Following, Imitative, Imputable, Imputed, Lexical, Lexicographic, Lexicologic, Lexigraphic, Noncreative, Nongerminal, Nonseminal, Obtained, Offshoot, Onomastic, Onomatologic, Onomatopoeic, Owing, Paronymic, Paronymous, Plagiarized, Procured, Putative, Referable, Referred to, Resultant, Resulting, Sequacious, Sequent, Sequential, Spin-off, Traceable, Uncreative, Uninventive, Unoriginal, Unpregnant
How to use Derivative in a sentence?
- Derivatives are securities that derive their value from an underlying asset or benchmark.
- Derivatives are usually leveraged instruments, which increases their potential risks and rewards.
- Most derivatives are not traded on exchanges and are used by institutions to hedge risk or speculate on price changes in the underlying asset.
- Exchange-traded derivatives like futures or stock options are standardized and eliminate or reduce many of the risks of over-the-counter derivatives.
- Common derivatives include futures contracts, forwards, options, and swaps.
- The derivative of my financial stock gains last week was from the purchases I made in oil and technology stocks the previous week.
- When the Swiss changed the relationship of the Swiss franc to other currencies, many traders made or lost huge sums on derivative contracts.
- The students graduate thesis was so derivative of the professors recently published book that she was called into the department office to defend herself against a charge of plagiarism.
Meaning of Derivative & Derivative Definition