derivative
Definition
A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, typically a commodity, bond, equity or currency. Examples of derivatives include futures and options. Advanced investors sometimes purchase or sell derivatives to manage the risk associated with the underlying security, to protect against fluctuations in value, or to profit from periods of inactivity or decline. These techniques can be quite complicated and quite risky.
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Related Terms
weather derivative
'derivative
' appears in the definitions of these terms on BusinessDictionary.comderivative security, addiction, correlation risk, credit derivative (CD), derivative products company (DPC), and 
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