Derivative instrument: Difference between revisions
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''Risk management - hedging''. | |||
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). | 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). | ||
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* [[IR]] | * [[IR]] | ||
* [[ISDA Master Agreement]] | * [[ISDA Master Agreement]] | ||
* [[Margining]] | |||
* [[Mark to market]] | |||
* [[Maturity]] | * [[Maturity]] | ||
* [[Notional principal]] | * [[Notional principal]] | ||
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* [[Potential Future Exposure]] | * [[Potential Future Exposure]] | ||
* [[Replacement cost]] | * [[Replacement cost]] | ||
* [[Risk management]] | |||
* [[Strike price]] | * [[Strike price]] | ||
* [[Tracker fund]] | * [[Tracker fund]] | ||
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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 08:41, 1 September 2018
Risk management - hedging.
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
- Risk management
- Strike price
- Tracker fund
- Transfer
- Underlying
- Underlying asset
- Underlying price
- XVA
