Derivative: Difference between revisions
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A [[financial instrument]], feared in Nebraska as some kind of [[Financial weapons of mass destruction|WMD]], in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate [[hedging]] activity, and for legions of patient [[negotiator|negotiators]] in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table. | A [[financial instrument]], feared in Nebraska as some kind of [[Financial weapons of mass destruction|WMD]], in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate [[hedging]] activity, and for legions of patient [[negotiator|negotiators]] in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table. | ||
Could be a [[swap]]<ref>Also, fondly, known as a [[sw-ŏp]], but ''never'' a [[sw-æp]]. [[Swap does not rhyme with crap|Swaps aren’t, and don’t rhyme with, crap]].</ref>, an [[option]] or a [[future]] | Could be a [[swap]]<ref>Also, fondly, known as a [[sw-ŏp]], but ''never'' a [[sw-æp]]. [[Swap does not rhyme with crap|Swaps aren’t, and don’t rhyme with, crap]].</ref>, an [[option]] or a [[future]]. | ||
Not, and especially now in light of the fabulous parallel regulation of the [[Securities Financing Transactions Regulation]], a [[stock loan]] or a [[repo]]. | Not, and especially not now, in light of the fabulous parallel regulation of the [[Securities Financing Transactions Regulation]], a [[stock loan]] or a [[repo]]. | ||
==Warning: boring stuff below this line== | ==Warning: boring stuff below this line== | ||
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: | :[[MiFID]] definition of [[derivative]] comes from the latter half (items (4) - (10)) of the definition of “[[Financial instrument - FCA Rulebook Term|Financial Instruments]]” set out in Section C of Annex I to [[MiFID]] as follows: | ||
Latest revision as of 13:30, 14 August 2024
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Derivative /dɪˈrɪvətɪv/ (n.)
A financial instrument, feared in Nebraska as some kind of WMD, in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate hedging activity, and for legions of patient negotiators in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table.
Could be a swap[1], an option or a future.
Not, and especially not now, in light of the fabulous parallel regulation of the Securities Financing Transactions Regulation, a stock loan or a repo.
Warning: boring stuff below this line
Where do you start?
- ‘derivative’ or ‘derivative contract’ means a financial instrument as set out in points (4) to (10) of Section C of Annex I to 2004/39/EC (EUR Lex)[2] as implemented by Article 38 and 39 of 1287/2006 (EUR Lex);
- MiFID definition of derivative comes from the latter half (items (4) - (10)) of the definition of “Financial Instruments” set out in Section C of Annex I to MiFID as follows: