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They are instruments that work off the back of the behavior of other financial instruments (derive from them). You could call them meta-securities, in a way.

For instance, the simplest derivatives are puts or calls, i.e. the right to buy or sell a share (or bond, or whatever) at a given price at a given date.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jul 4th, 2007 at 12:27:10 PM EST
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