Derivative instrument

From ACT Wiki
Revision as of 14:54, 2 October 2013 by imported>Doug Williamson (Rationalisation of other links to current style)
Jump to navigationJump to search

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


Other links