trading
derivative
A financial contract whose value is derived from an underlying asset, index, or rate, such as stocks, bonds, or commodities.
Example
"Options and futures are the most common types of derivatives traded on financial markets."
💡 Memory Tip
DERIVE-ative — it derives its value from something else.
Etymology
From Latin 'derivare' meaning 'to lead away from' — its value leads away from (is based on) something else.
Common Misspellings
derivitivederivatvedervativederivitive
Related Terms
See Also
underlying asset