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General TradingD
Derivative
A derivative is a financial instrument whose value is derived from the performance of an underlying asset, index, interest rate, or other reference point. Common types include options, futures, forwards, and swaps, and they are used for hedging risk, speculation, and gaining leveraged exposure to markets.
Example
“The fund manager used interest rate swap derivatives to hedge the portfolio's exposure to rising rates without selling any of its bond holdings.”