derivative instrument (Meaning)
Wordnet
derivative instrument (n)
a financial instrument whose value is based on another security
Synonyms & Antonyms of derivative instrument
No Synonyms and anytonyms found
derivative instrument Sentence Examples
- Investors often use derivative instruments to hedge against fluctuations in stock prices.
- A common derivative instrument is a futures contract, which allows parties to buy or sell assets at a predetermined price in the future.
- Options are another type of derivative instrument, giving investors the right but not the obligation to buy or sell assets at a specified price.
- Swaps are derivative instruments used to exchange cash flows or liabilities between parties.
- The use of complex derivative instruments contributed to the financial crisis of 2008.
- Derivative instruments can be useful for managing risk in volatile markets.
- Traders employ derivative instruments to profit from changes in the value of underlying assets.
- Structured products, such as collateralized debt obligations (CDOs), are derivative instruments composed of multiple underlying assets.
- Derivative instruments can be traded on various exchanges or over-the-counter (OTC) markets.
- Understanding the risks associated with derivative instruments is essential for investors before engaging in trading activities.
FAQs About the word derivative instrument
a financial instrument whose value is based on another security
No synonyms found.
No antonyms found.
Investors often use derivative instruments to hedge against fluctuations in stock prices.
A common derivative instrument is a futures contract, which allows parties to buy or sell assets at a predetermined price in the future.
Options are another type of derivative instrument, giving investors the right but not the obligation to buy or sell assets at a specified price.
Swaps are derivative instruments used to exchange cash flows or liabilities between parties.
