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Glossary

From A to Z, discover clear and concise explanations of key terms, empowering you to make informed decisions in the dynamic world of finance with our comprehensive glossary.

Derivatives derive their value from the values of other financial instruments. Eg a stock option derives its value from the value of a stock and therefore, it is considered a derivative. A swap is also a derivative due to the fact that its value is derived from the interest rate indices. Conversely, the primary instruments are cash instruments, with value acquired directly from markets - equities, bonds, commodities, etc. Forward and future contracts, swaps, and options are the most common types of derivatives.