BNET Business Dictionary
Business Definition for: Derivative
- a security, such as an option, the price of which has a strong correlation with an underlying financial instrument
Wiktionary Definition for: Derivative
- #Imitative of the work of someone else
- #(''copyright law'') Referring to a work, such as a translation or adaptation, based on another work that may be subject to copyright restrictions
- #Having a value that depends on an underlying asset of variable value
- #Lacking originality
- #Something based on another source.
- #A word that derives from another one.
- #A financial instrument whose value depends on the value of something else, such as warrants, options etc.
- # chemistry A chemical derived from another.
- # calculus The derived function of a function.
- Ex:''The derivative of is ''
- # calculus The value of this function for a given value of its independent variable.
- Ex:''The derivative of at x = 3 is 9.''
Additional Resources
- FASB issues statement on derivative instruments
- The Financial Accounting Standards Board has issued Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which amends and clarifies accounting for derivative instruments, including certain derivative instruments The Financial Accounting Standards Board has issued Statement No. 149, Amendment of Statement 133 on Derivative Instruments and...
- Research articles 2003-06-01
- Drift Estimation of Generalized Security Price Processes from High Frequency Derivative Prices
- This article presents a framework for using high frequency derivative prices to estimate the drift of generalized security price processes. This work may be seen more generally as a quasi-likelihood approach to estimating continuous-time parameters of derivative pricing models using discrete option data. It develops a generalized derivative-based estimator for...
- White papers 2003-01-01
- FASB amends derivative definition, Statement 133. (Domestic).(Financial Accounting Standards Board)(Brief Article)
- The Financial Accounting Standards Board FASB issued an Exposure Draft to clarify the definition of a derivative. Amendment of Statement 133 on Derivative Instruments and Hedging Activities amends Statement No. 133, Accounting for Derivative Instru The Financial Accounting Standards Board FASB issued an Exposure Draft...
- Research articles 2002-06-01
- GASB Improves Derivative Disclosure Requirements
- In an effort to improve disclosures associated with derivative contracts, the Governmental Accounting Standards Board GASB has issued critical accounting guidance that will provide more comprehensive reporting by state and local governments. Under the new guidance, users of financial statements will be better informed about the risks assumed in derivative...
- White papers 2003-06-25
- Long-Term Information, Short-Lived Derivative Securities
- This paper explores strategic trade in short-lived derivative securities by agents that possess long-term information about an underlying asset. In contrast to trading equity, where an informed agent will ultimately benefit from his trades, trading short-lived securities is profitable only if the price impounds the private information before expiry. A...
- White papers 2000-08-26
- Combining Derivative Products
- Financial engineering is a term that refers to the development of pricing methodologies and hedging techniques underlying financial derivative products. One aspect of financial engineering that leverages the power of derivative products in a simple, elegant fashion is the combination of existing derivative products. Let's consider a few of these...
- White papers
- Theory of Financial Risk and Derivative Pricing: From Statistical Physics to Risk Management
- Risk control and derivative pricing have become of major concern to financial institutions. The need for adequate statistical tools to measure and anticipate the amplitude of the potential moves of financial markets is clearly expressed, in particular for derivative markets. This report summarizes recent theoretical developments, some of which were...
- White papers 2003-11-13
- Fitch Affirms Merrill Lynch Derivative Products at 'AAA'
- NEW YORK -- Fitch Ratings has affirmed Merrill Lynch Derivative Product AG's MLDP Issuer Default Rating IDR and counterparty rating at 'AAA'. The Rating Outlook is Stable. MLDP is a derivative product company DPC with a 'continuation' structure that serves as an intermediary for OTC derivative transactions between highly rated...
- Research articles 2007-11-21
- GASB Issues Statement No. 53, Accounting and Financial Reporting for Derivative Instruments
- NORWALK, Conn. -- The Governmental Accounting Standards Board GASB today issued GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. Statement 53 is intended to improve how state and local governments report information about derivative instruments--financial arrangements used by governments to manage specific risks or make investments--in their...
- Research articles 2008-06-30
- Company Profile for Derivative Solutions
- Business Editors --BUSINESS WIRE Derivative Solutions is a leading provider of analytics and portfolio management software to financial institutions trading and investing in the bond market. By combining the best Analytics, Data Coverage and Technology available anywhere, Derivative Solutions delivers fast, easy-to-use, market-proven solutions to the fixed income...
- Research articles 2004-05-28
- FactSet Research Systems Inc. Acquires Derivative Solutions; Acquired Product Suite Complements FactSet's Fixed Income Reference Data and Portfolio Analytics Services
- NORWALK, Conn. -- FactSet Research Systems Inc. (NYSE: FDS), a major supplier of computer-based financial and economic data to the investment community, today announced that it has acquired all of the outstanding capital stock of Derivative Solutions Inc. FactSet paid consideration of $42.5 million in cash and 305,748 shares of...
- Research articles 2005-08-02
- Estimation Of Excess Returns From Derivative Prices And Testing For Risk Neutral Pricing
- This article develops an econometric framework for i estimating excess returns of the security process from high frequency derivative prices, ii testing for risk neutral pricing, and iii measuring premiums outside the no-arbitrage pricing model. Applying quasi-likelihood and Feynman construct the estimator–Kac theory to the risk neutral contingent claims pricing...
- White papers 2003-01-01
- Dividends in the Theory of Derivative Securities Pricing
- This article develops the fundamental aspects of the theory of martingale pricing of derivative securities in a setting where the cumulative gains processes are Ito processes, while the cumulative dividend processes of both the underliers and the derivative securities are general enough to cover all cases encountered in practical applications....
- White papers 2003-08-08
- Derivative Instruments and Islamic Finance: Some Thoughts for Reconsideration
- This paper examines contemporary derivative instruments and the Islamic viewpoint of the new instruments. The validity and permissibility of these instruments appears to vary by scholar. This paper analyzes forwards, futures and options, examines the evolution of these instruments, their unique benefits and makes a case for why they are...
- White papers 2001-09-07
- Aggregation of Results From Index-Based Insurance Derivative Hedging Transactions
- This paper has been prepared to comment on the treatment of aggregate results from index-based derivative contracts used by insurance companies to hedge insurance underwriting risk. The paper previously presented by the American Academy of Actuaries1 Index Securitization Task Force dealt primarily with the effectiveness of the individual index-based derivative...
- White papers 2000-03-06
- Derivative Contracts and Markets
- This document's elucidates derivative contract, which is a contractual agreement to execute an exchange at some future date. The term, "derivative," arises from the fact that the agreement "derives" its value from the price of an underlying asset such as a stock, bond, currency, or commodity. A stock index futures...
- White papers 2002-08-05
- Model Uncertainty and Its Impact on the Pricing of Derivative Instruments
- Model uncertainty, in the context of derivative pricing, results in mispricing of contingent claims due to uncertainty on the choice of the pricing models. This paper introduces here a quantitative framework for measuring model uncertainty in option pricing models. After discussing some properties, which a quantitative measure of model uncertainty...
- White papers 2004-06-01
- The Dow Jones CDX Family of Indices Announces Roll Dates for its US Investment Grade, Emerging Market and US High Yield Credit Derivative Indices
- NEW YORK -- CDS IndexCo LLC, the owner of the Dow Jones CDX family of credit derivative indices, today announced the roll dates for its US Investment Grade, Emerging Market and US High Yield credit derivative indices. The US Investment Grade and Emerging Market indices will roll on September 20,...
- Research articles 2005-09-08
- The Dow Jones CDX Family of Indices Announces Roll Dates for its US Investment Grade, Emerging Market and US High Yield Credit Derivative Indices
- NEW YORK -- CDS IndexCo LLC, the owner of the Dow Jones CDX family of credit derivative indices, today announced the roll dates for its US Investment Grade, Emerging Market and US High Yield credit derivative indices. The US Investment Grade and Emerging Market indices will roll on September 20,...
- Research articles 2005-09-06
- BIS studies bank derivative use. (Bank for International Settlements)
- The Basle, Switzerland-based Bank for International Settlements called for more stringent monitoring of the derivatives market and for greater caution on the part of firms trading in these markets. Interbank operations using derivative activities have expThe Basle, Switzerland-based Bank for International Settlements called for more stringent monitoring of the derivatives...
- Research articles 1993-01-01
