Derivative instrument: Difference between revisions
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imported>Doug Williamson (Removed link) |
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*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, The Treasurer, December | *[http://www.treasurers.org/node/8599 Masterclass: Derivatives, The Treasurer, December 2012] | ||
[[Category:Risk_frameworks]] | [[Category:Risk_frameworks]] | ||
Revision as of 15:33, 8 March 2017
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).
Derivative instruments are widely used by non-financial corporates for hedging purposes.
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
- CCR
- Collateral
- Commodity risk
- CP
- Credit support annex
- Embedded derivative
- ETD
- FC
- Fixing instrument
- FVTOCI
- FVTPL
- Hedge fund
- Hedging
- IR
- ISDA Master Agreement
- Maturity
- Notional principal
- Option
- Outright
- Potential Future Exposure
- Replacement cost
- Strike price
- Tracker fund
- Transfer
- Underlying
- Underlying asset
- Underlying price
- XVA
