Alert: shifting parts of speech! As a noun, a derivative is kind of financial agreement or deal. As an adjective, though, derivative describes something that borrows heavily from something else that came before it.
The economic meltdown of the last decade is due largely to the mismanagement of derivatives, which are deals based on the outcome of other deal. A movie plot might be described as derivative if it steals from another film — say, if it lifts the tornado, the witch, and the dancing scarecrow from The Wizard of Oz.
