Derivative Instruments
Financial innovation has brought many new financial instruments whose pay-offs or values depend on the prices of stocks. Some examples are exchange-traded funds (ETFs), stock index and stock options, equity swaps, single-stock futures, and stock index futures. These last two may be traded on futures exchanges (which are distinct from stock exchanges—their history traces back to commodities futures exchanges), or traded over-the-counter. As all of these products are only derived from stocks, they are sometimes considered to be traded in a (hypothetical) derivatives market, rather than the (hypothetical) stock market.
Read more about this topic: Stock Market
Famous quotes containing the words derivative and/or instruments:
“When we say “science” we can either mean any manipulation of the inventive and organizing power of the human intellect: or we can mean such an extremely different thing as the religion of science the vulgarized derivative from this pure activity manipulated by a sort of priestcraft into a great religious and political weapon.”
—Wyndham Lewis (1882–1957)
“We are all instruments endowed with feeling and memory. Our senses are so many strings that are struck by surrounding objects and that also frequently strike themselves.”
—Denis Diderot (1713–84)