Financial Derivative
/ˌfaɪnænʃəl dɪˈrɪvətɪv/
Definitions
- (n.) A financial instrument whose value is derived from the performance of underlying assets, indices, or rates, used for hedging, speculation, or arbitrage.
The company used a financial derivative to hedge against currency risk.
Forms
- financial derivative
- financial derivatives
Related terms
See also
Commentary
Financial derivatives are regulated under specific financial laws and require precise drafting to clearly define underlying assets and rights.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.