Derivative instrument: Difference between revisions
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imported>Doug Williamson (Link with Margining page.) |
imported>Doug Williamson (Add author and delete historic date to Treasurer article.) |
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===Other links=== | ===Other links=== | ||
*[http://www.treasurers.org/node/8599 Masterclass: Derivatives, The Treasurer | *[http://www.treasurers.org/node/8599 Masterclass: Derivatives, ''Sarah Boyce,'' The Treasurer] | ||
[[Category:Risk_frameworks]] | [[Category:Risk_frameworks]] | ||
Revision as of 14:52, 11 April 2018
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
- Margining
- Mark to market
- Maturity
- Notional principal
- Option
- Outright
- Potential Future Exposure
- Replacement cost
- Strike price
- Tracker fund
- Transfer
- Underlying
- Underlying asset
- Underlying price
- XVA
