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Derivative Meaning: Definition, Examples, and Translations

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derivative

[dɪˈrɪv.ə.tɪv ]

Definitions

Context #1 | Noun

finance

A financial instrument whose value is derived from an underlying asset, index, or rate. Derivatives can be used for hedging, speculation, or investment purposes.

Synonyms

financial instrument, futures contract, option.

Examples of usage

  • Investors use derivatives to manage risk in their portfolios.
  • She bought a derivative that tracks the performance of the S&P 500 index.
Context #2 | Adjective

mathematics

Obtained by differentiation; derived from another source or element.

Synonyms

derived, imitative, secondary.

Examples of usage

  • The derivative function of f(x) is denoted as f'(x).
  • The novel was a derivative work inspired by classic literature.

Translations

To see the translation, please select a language from the options available.

Origin of 'derivative'

The word 'derivative' originated from the Latin word 'derivare', meaning 'to derive'. In the financial context, derivatives have been used since ancient times with the first recorded options trading taking place in ancient Greece. The modern usage of derivatives in finance began to gain popularity in the late 20th century with the development of more complex financial instruments.

See also: derivable, derivation, derive, derived.

Word Frequency Rank

At #6,099 in frequency, this word belongs to advanced vocabulary. It's less common than core vocabulary but important for sophisticated expression.