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DERIVATIVE INSTRUMENT

Statistics Directorate    
Definition:
A derivative instrument is a financial instrument whose value depends on some underlying financial asset, commodity index or predefined variable.

Context:
Some of the main uses of derivative instruments are to fix future prices in the present (forwards and futures), to exchange cash flows or modify asset characteristics (swaps) and to endow the holder with the right but not the obligation to engage in a transaction (options).

Source Publication:
Guide to the International Banking Statistics, Bank for International Settlements, Basel, Switzerland, 2000, Part III – Glossary of Terms.

Hyperlink:
http://www.bis.org/publ/meth07.pdf

Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Monday, March 03, 2003