Derivatives

Financial arrangements whose returns are linked to, or derived from, some underlying stockAn instrument that signifies an ownership position in a corporation., bondWritten evidence of an obligation given by a corporation or government entity. A surety instrument. indexThe measure of interest rate changes that the lender uses to decide how the interest rate on an ARM, commodityA commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated, or other assetThe entire property of a person, association, corporation, or estate applicable or subject to the payment of debts.. They come in two basic types: options and “forward-type” derivatives, which include forwards, futuresSee Futures Contract., and swaps. They may be listed on exchanges or negotiated privately between institutions.