derivative security


A financial security, such as an option or future, whose characteristics and value depend on the characteristics and value of an underlying security.

Use derivative security in a sentence

You should try to make sure that you know exactly what you are going to get before you enter into a derivative security.

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Sonny decided that the derivative security of the soy industry did not provide him with enough assurance on his investment.

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There was some derivative security that we had to handle and we decided that it was time to move on and work with someone who knew what they were talking about.

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collateralized debt obligation squared (CDO-squared) collateralized debt obligation cubed (CDO-cubed)