Derivatives · glossary

Derivative

A contract whose payments are worked out from a number neither party controls, such as an interest rate, applied to an amount nobody lends. The number is the underlying and the amount is the notional. Definition: Transaction · Chapter 1

Explained in Chapter 1, What a Derivative Is, of Derivatives.

How it comes up, in Chapter 1
A derivative is a contract whose payments are worked out from a number neither party controls, such as an interest rate. This workbook follows one company's interest-rate hedge from the first proposal to the day it ends. You are a junior solicitor at Blackwood & Steel LLP in London, and you act for the company.
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As defined in the training master agreement
a swap, cap, floor, collar, forward, option or similar contract entered into between the parties, governed by this Agreement and evidenced by a Confirmation;
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Where this term lives

This term is part of one complete fictional deal, with every document attached and a test after every chapter. Open Derivatives → · All terms A–Z →