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Derivatives

By Kimberly Amadeo, About.com

New York Financial District

New York Financial District (Credit: Mario Tama/Getty Images)

Definition: Complicated financial instruments, like options and futures contracts, that derive their value by reference to an underlying asset or index.

Examples of Derivatives

Also Known As: Financial Derivatives, Trading Derivatives
Examples:
Hedge funds use financial derivatives to gain more leverage in stock trading.

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