Equity derivative

Practical Law UK Glossary 9-509-2405 (Approx. 3 pages)

Glossary

Equity derivative

A financial instrument that references and offers economic exposure to the performance of an equity asset or other equity-related variable from which the instrument's price or value is derived.

Equity derivatives are used primarily by:

Funds and investors, as speculative investments.
End users and banks, as commercial hedges.

The main types of equity derivatives are:

Equity Options.
Equity Forwards.
Equity Futures.
Equity Swaps (such as a total return swaps).
Structured equity products (such as equity-linked notes and fund-linked notes).

For a detailed analysis of equity derivatives, see Practice note, Equity derivatives: overview (UK).

End of Document

Also Found In

Swaps and Derivatives
Structured Finance & Derivatives: Tax

Resource ID 9-509-2405

Maintained

Resource Type Glossary

Jurisdictions

England
Wales