Dictionary

Derivative

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 fluctuations in the underlying asset. Most common underlying assets include: stocks, bonds, commodities, currencies, interest rates and market indexes. Most common types of derivatives: futures contracts, forward contracts, options and swaps.

 

Wikipedia: https://en.wikipedia.org/wiki/Derivative_%28finance%29