Derivative
A derivative is a financial contract whose value or cash flows depend on an asset, rate, index, event, or other reference. Learn the types, uses, and risks.
Core derivative concepts: underlyings, payoff structures, settlement, notional amounts, market organization, valuation, and contract risks.
Derivative instruments are contracts whose value or cash flows depend on a stated reference. This branch owns the core Derivative guide, including the differences among forwards, futures, options, and swaps and the evidence needed to evaluate their payoffs and risks.
Use the parent Derivatives page to browse specialized options, forwards, futures, swaps, credit products, pricing inputs, and hedging terms. Use this page when the first question is what makes an instrument a derivative or which contract feature determines its economic result.
Use the table below to move from this landing page into the term page that best matches the instrument evidence.
| Term | Use it for |
|---|---|
| Derivative | Direct definition, contract families, hedge and speculation uses, market structures, valuation measures, lifecycle evidence, and risks. |
| Underlying Asset | The asset, rate, index, event, or other reference that drives the derivative calculation. |
| Notional Value | The calculation reference that must be distinguished from current market value, margin, and loss. |
| Equity-Linked Note | A debt instrument whose repayment or return depends on an equity reference and may embed option-like exposure. |
A derivative can reference an item without delivering or transferring ownership of it. A weather derivative may settle from a temperature index, an interest-rate swap may exchange calculated payments without exchanging principal, and an equity-index future may settle in cash. The contract’s payoff and settlement clauses, not the broad product name, determine what changes hands.
Derivative Instruments and Contract Structures content is educational and does not provide personalized investment, tax, legal, accounting, valuation, derivatives, or securities advice.
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A derivative is a financial contract whose value or cash flows depend on an asset, rate, index, event, or other reference. Learn the types, uses, and risks.