Definition of "derivative" []

• Resulting from or employing derivation: a derivative word; a derivative process. (adjective)
• Copied or adapted from others: a highly derivative prose style. (adjective)
• Something derived. (noun)
• Linguistics A word formed from another by derivation, such as electricity from electric. (noun)
• Mathematics The limiting value of the ratio of the change in a function to the corresponding change in its independent variable. (noun)

American Heritage(R) Dictionary of the English Language, Fifth Edition. Copyright (c) 2011 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

• "The term derivative product is a general term for a contractual agreement between two parties whereby the counterparties exchange -- or swap -- payments based some underlying benchmarks, applied against a contract notional amount."
• "Frodo Baggins is renamed Frodo Sumkin (a derivative from the Russian word sumka, or bag)."
• "Financial markets use the term derivative to describe a transaction that derives its value from an independent reference asset."