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derivative instrument

DEFINITIONS OF: derivative instrument

1

n a financial instrument whose value is based on another security

Synonyms:
derivative
Types:
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futures contract
an agreement to buy or sell a specific amount of a commodity or financial instrument at a particular price on a stipulated future date; the contract can be sold before the settlement date
option
the right to buy or sell property at an agreed price; the right is purchased and if it is not exercised by a stated date the money is forfeited
naked option
a put or call option for which the seller or buyer has no underlying security position
covered option
a put or call option backed by the shares underlying the option
call, call option
the option to buy a given stock (or stock index or commodity future) at a given price before a given date
put, put option
the option to sell a given stock (or stock index or commodity future) at a given price before a given date
straddle
the option to buy or sell a given stock (or stock index or commodity future) at a given price before a given date; consists of an equal number of put and call options
incentive option, incentive stock option
an option granted to corporate executives if the company achieves certain financial goals
stock-index futures
a futures contract based on a stock index; a bet on the future price of the indexed group of stocks
stock option
the right to buy or sell a stock at a specified price within a stated period
lock-up option
an option to buy the crown jewels offered to a white knight in order to forestall a hostile takeover
Type of:
instrument, legal document, legal instrument, official document
(law) a document that states some contractual relationship or grants some right
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