Dec 31, 2025 · Derivatives are usually leveraged instruments, which increases their potential risks and rewards. Common derivatives include futures contracts, forwards, options, and swaps.

What are Derivatives? Derivatives are financial contracts whose value is linked to the value of an underlying asset. They are complex financial instruments that are used for various purposes, …

Nov 22, 2025 · A derivative is a financial instrument whose value changes in relation to a change in an underlying, such as an interest rate or exchange rate.

ASC 815-10-15-83 defines a derivative instrument. A derivative instrument is a financial instrument or other contract with all of the following characteristics: Underlying, notional amount, payment provision.

Aug 26, 2025 · Derivatives are financial instruments that obtain value from an underlying asset, including stocks, bonds, commodities, currencies, interest rates, and indices.

Apr 30, 2024 · A derivative is a financial instrument that derives its value from something else. Professional traders tend to buy and sell them to offset risk.

Derivatives are one of the three main categories of financial instruments, the other two being equity (i.e., stocks or shares) and debt (i.e., bonds and mortgages).

Feb 25, 2025 · Derivatives are financial contracts between 2 parties whose value comes from another underlying asset. Option contracts, futures, swaps, and collateralized debt obligations (CDOs) are …

instruments that transfer risks from one party to another. They are called derivatives because they derive their value from the value of some-thing else—an underlying right or interest.

In this Refresher Reading, learn how to define a derivative and describe basic features of a derivative instrument, describe the basic features of derivative markets, and contrast over-the-counter and …