derivative definition | Dictionary.com

de⋅riv⋅a⋅tive

[di-riv-uh-tiv]

–adjective

2.	not original; secondary.

–noun

3.	something derived.

4.	Also called derived form. Grammar. a form that has undergone derivation from another, as atomic from atom.

5.	Chemistry. a substance or compound obtained from, or regarded as derived from, another substance or compound.

Also called differential quotient; especially British, differential coefficient. Mathematics. the limit of the ratio of the increment of a function to the increment of a variable in it, as the latter tends to 0; the instantaneous change of one quantity with respect to another, as velocity, which is the instantaneous change of distance with respect to time. Compare first derivative, second derivative.

7.	a financial contract whose value derives from the value of underlying stocks, bonds, currencies, commodities, etc.

Origin:
1400–50; late ME derivatif < LL dērīvātīvus, equiv. to L dērīvāt(us) (see derivation ) + -īvus -ive

Related forms:

de⋅riv⋅a⋅tive⋅ly, adverb

de⋅riv⋅a⋅tive⋅ness, noun

Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2009.
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Link To derivative

de·riv·a·tive (dĭ-rĭv'ə-tĭv)

adj.

Resulting from or employing derivation: a derivative word; a derivative process.
Copied or adapted from others: a highly derivative prose style.

Something derived.
Linguistics A word formed from another by derivation, such as electricity from electric.
Mathematics
1. The limiting value of the ratio of the change in a function to the corresponding change in its independent variable.
2. The instantaneous rate of change of a function with respect to its variable.
3. The slope of the tangent line to the graph of a function at a given point. Also called differential coefficient, fluxion.
Chemistry A compound derived or obtained from another and containing essential elements of the parent substance.
Business An investment that derives its value from another more fundamental investment, as a commitment to buy a bond for a certain sum on a certain date.

de·riv'a·tive·ly adv., de·riv'a·tive·ness n.

The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Derivative

De*riv"a*tive\, a. [L. derivativus: cf. F. d['e]rivatif.] Obtained by derivation; derived; not radical, original, or fundamental; originating, deduced, or formed from something else; secondary; as, a derivative conveyance; a derivative word.

Derivative circulation, a modification of the circulation found in some parts of the body, in which the arteries empty directly into the veins without the interposition of capillaries. --Flint. -- De*riv"a*tive*ly, adv. -- De*riv"a*tive*ness, n.

Derivative

De*riv"a*tive\, n. 1. That which is derived; anything obtained or deduced from another.

2. (Gram.) A word formed from another word, by a prefix or suffix, an internal modification, or some other change; a word which takes its origin from a root.

3. (Mus.) A chord, not fundamental, but obtained from another by inversion; or, vice versa, a ground tone or root implied in its harmonics in an actual chord.

4. (Med.) An agent which is adapted to produce a derivation (in the medical sense).

5. (Math.) A derived function; a function obtained from a given function by a certain algebraic process.

Note: Except in the mode of derivation the derivative is the same as the differential coefficient. See Differential coefficient, under Differential.

6. (Chem.) A substance so related to another substance by modification or partial substitution as to be regarded as derived from it; thus, the amido compounds are derivatives of ammonia, and the hydrocarbons are derivatives of methane, benzene, etc.

Webster's Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.
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Language Translation for : derivative

Spanish: carente de originalidad, poco original,

German: abgeleitet,

Japanese: 派生的な

More Translations »

Derivative

In finance, a security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by the fluctuations of the underlying asset. The most common underlying assets include: stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.

Investopedia Commentary

Futures contracts, forward contracts, options and swaps are the most common types of derivatives. Because derivatives are just contracts, just about anything can be used as an underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region.

Derivatives are generally used to hedge risk, but can also be used for speculative purposes. For example, a European investor purchasing shares of an American company off of an American exchange (using American dollars to do so) would be exposed to exchange-rate risk while holding that stock. To hedge this risk, the investor could purchase currency futures to lock in a specified exchange rate for the future stock sale and currency conversion back into euros.

Also spelled: derivatives, derivitives, derivitive

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derivative

An asset that derives its value from another asset. For example, a call option on the stock of Coca-Cola is a derivative security that obtains value from the shares of Coca-Cola that can be purchased with the call option. Call options, put options, convertible bonds, futures contracts, and convertible preferred stock are examples of derivatives. A derivative can be either a risky or low-risk investment, depending upon the type of derivative and how it is used. See also underlying asset 2.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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Main Entry: de·riv·a·tive
Pronunciation: d&-'ri-v&-tiv
Function: noun
: a contract or security that derives its value from that of an underlying asset (as another security) or from the value of a rate (as of interest or currency exchange) or index of asset value (as a stock index)
NOTE: Derivatives often take the form of customized contracts transacted outside of security exchanges, while other contracts, such as standard index options and futures, are openly traded on such exchanges. Derivatives often involve a forward contract.

Main Entry: derivative
Function: adjective
1 : arising out of or dependent on the existence of something else —compare DIRECT
2 : of, relating to, or being a derivative derivative transaction> —de·riv·a·tive·ly adverb

Main Entry: ¹de·riv·a·tive
Pronunciation: di-'riv-&t-iv
Function: adjective
1 : formed by derivation
2 : made up of or marked by derived elements

Main Entry: ²derivative
Function: noun
1 : something that is obtained from, grows out of, or results from an earlier or more fundamental state orcondition
2 a : a chemical substance related structurally to another substance and theoretically derivable from it b : a substance that can be made from anothersubstance

derivative de·riv·a·tive (dĭ-rĭv'ə-tĭv)
n.

Something obtained or produced by modification of something else.
A chemical compound that may be produced from another compound of similar structure in one or more steps.

adj.
Resulting from, characterized by, or employing derivation.

derivative (dĭ-rĭv'ə-tĭv) Pronunciation Key
In calculus, the slope of the tangent line to a curve at a particular point on the curve. Since a curve represents a function, its derivative can also be thought of as the rate of change of the corresponding function at the given point. Derivatives are computed using differentiation.

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