Derivative: Difference between revisions

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1. Derivative instrument.
1. ''Financial instruments.''
 
Abbreviation for derivative financial instrument.
 
 
2. ''Maths''. 


2. ''Maths''.
A derivative function describes the rate of change of the underlying function, with respect to changes in one of the variables in the underlying function.
A derivative function describes the rate of change of the underlying function, with respect to changes in one of the variables in the underlying function.


The first derivative describes the slope of the function curve at a given point on the curve.
*The first derivative describes the slope of the function curve at a given point on the curve.
The second derivative describes the rate of change of the slope.  In other words the degree of curvature, at a given point.
*The second derivative describes the rate of change of the slope.  In other words the degree of curvature, at a given point.
 
 
Most of the 'Greek letters' in options analysis are the first derivative of the option value, as the related value driver changes.
 


== See also ==
== See also ==
* [[Credit derivative]]
* [[Crypto-derivative]]
* [[Delta]]
* [[Derivative instrument]]
* [[Derivative instrument]]
* [[Differentiation]]
* [[Embedded derivative]]
* [[Embedded derivative]]
* [[Financial instrument]]
* [[Fixing derivative]]
* [[Greeks]]
* [[Greeks]]
* [[Interest rate derivative]]


[[Category:Manage_risks]]
[[Category:Financial_products_and_markets]]

Latest revision as of 09:21, 31 August 2022

1. Financial instruments.

Abbreviation for derivative financial instrument.


2. Maths.

A derivative function describes the rate of change of the underlying function, with respect to changes in one of the variables in the underlying function.

  • The first derivative describes the slope of the function curve at a given point on the curve.
  • The second derivative describes the rate of change of the slope. In other words the degree of curvature, at a given point.


Most of the 'Greek letters' in options analysis are the first derivative of the option value, as the related value driver changes.


See also