A type of financial instrument which is derived from another asset, index, event, value or condition; which is known as an underlying asset. Instead of trading or exchanging the underlying asset it signifies an agreement to exchange cash or assets over time dependent on the underlying asset.

Previous Terms: 1031 Exchange, 1035 Exchange, AARP, Abeyance, Abstraction Principle, Accelerated Amortization, Acceptance Credit, Acceptance of a Bill of Exchange, Accommodation Bill, Accommodation Endorser