Derivative instrument
From ACT Wiki
A derivative instrument or contract is one whose value and other characteristics are derived from those of another asset or instrument (sometimes known as the Underlying Asset).
For example, a share option is a type of derivative contract, allowing the holder to buy shares at a certain predetermined strike price. The value of the share option derives from the current price of the related underlying share relative to the option strike price.
See also
- Commodity risk
- Embedded derivative
- Fixing instrument
- Maturity
- Notional principal
- Option
- Strike price
- Tracker fund
- Underlying
- Underlying asset
- Underlying price
External links
"Masterclass: Derivatives" The Treasurer magazine: www.treasurers.org