0
A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.
For more detailed information, refer to the Investopedia website.
What else can I help you with?
What is a derivative financially speaking Brightbridge Wealth Management asks?
A derivative is a contract with financial performance that is derived from the performance of something else. That "something else" is an underlying asset commonly termed "the underlying" and may be another financial instrument, another derivative, or an index of some kind.
What is a credit risk when entering into a derivative contract?
Credit Risk. Credit risk or default risk evolves from the possibility that one of the parties to a derivative contract will not satisfy its financial obligations under the derivative contract.
What is the adverb for finance?
The noun or verb finance has the derivative adjective form financial. The adverb form is financially.
What does 'tranche' mean in financial terms?
Tranche is a derivative of the same french word meaning "slice." In financial terms it means a part of a transaction, for example an investment could be divided by tranches and have varying terms and returns depending upon the tranche.
What is derivative in share market?
In the share market, a derivative is a financial instrument whose value is derived from the performance of an underlying asset, such as stocks, bonds, or indices. Common types of derivatives include options and futures contracts, which allow investors to speculate on price movements or hedge against risks. These instruments can enhance returns but also come with higher risks due to their leverage. Overall, derivatives are used for both investment strategies and risk management in the financial markets.
What is a derivative financially speaking Brightbridge Wealth Management asks?
A derivative is a contract with financial performance that is derived from the performance of something else. That "something else" is an underlying asset commonly termed "the underlying" and may be another financial instrument, another derivative, or an index of some kind.
What has the author Richard D Bateson written?
Richard D. Bateson has written: 'Financial derivative investments' -- subject- s -: Derivative securities
What is a credit risk when entering into a derivative contract?
Credit Risk. Credit risk or default risk evolves from the possibility that one of the parties to a derivative contract will not satisfy its financial obligations under the derivative contract.
The first exchange traded financial derivative in the Indian Market is?
Index futures
The three basic Types of financial assets traded in market?
Debt Equity Derivative
What are the different Derivative Categories?
A Derivative is a financial product that is derived out of the value of an underlying asset. Derivatives are very popular and are widely used financial instruments. Derivative products can be classified into the following main types: 1. Forwards 2. Futures 3. Options 4. Swaps 5. Warrants 6. Leaps & 7. Baskets
What is derivative exposure?
Derivative exposure refers to the risk associated with financial derivatives, which are instruments whose value is derived from an underlying asset, index, or benchmark. This exposure arises from fluctuations in the prices of the underlying assets, potentially leading to gains or losses for the holder of the derivative. It can be used for hedging purposes to mitigate risk or for speculation to profit from price movements. Managing derivative exposure is crucial for investors and institutions to maintain financial stability.
How do you create a financial derivative?
To create a financial derivative, you first identify the underlying asset, such as stocks, bonds, or commodities. Next, determine the type of derivative you want to create, such as options, futures, or swaps, based on the desired exposure or strategy. After that, establish the contract terms, including expiration date, strike price, and settlement conditions. Finally, ensure compliance with regulatory requirements and market standards before launching the derivative in the market.
What are derivative liabilities?
Derivative liabilities are financial obligations that arise from derivative contracts, such as options, futures, and swaps. These liabilities represent the potential future outflows of cash or other assets that a company might face if the market moves against its position in the derivative. They are recorded on the balance sheet at fair value and can fluctuate based on changes in market conditions. Essentially, they reflect the company's exposure to market risks and are an important aspect of managing financial risk.
What is the adverb for finance?
The noun or verb finance has the derivative adjective form financial. The adverb form is financially.
What is deravaties?
Derivatives are financial instruments that normally peg their value to another financial instrument. For example, an option or a future is a derivative because it gets its value from a stock or bond.
What does a credit derivative refer to?
A credit derivative is a financial instrument which separates and transfers some of the credit risk of a loan. Some examples of credit derivatives are credit linked notes or credit default swaps.
