DERIVATIVE Meaning and
Definition
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Derivative, when used as an adjective, refers to something that is derived or obtained from another source, possessing characteristics that are not original but instead borrowed, based on, or influenced by something else. It signifies a secondary or indirect form or expression of an original concept or idea.
When used as a noun, derivative typically refers to a financial instrument, contract, or investment that derives its value from an underlying asset, such as stocks, bonds, commodities, or currencies. Derivatives can include options, futures, swaps, or forward contracts, and their value is directly linked to the price movements of the underlying asset. They are used by investors and hedgers as tools for managing risks or speculating on future price fluctuations.
In a broader sense, a derivative can also indicate a mathematical function or expression obtained from another function through differentiation or integration. In calculus, taking the derivative of a function yields a new function that represents the rate of change of the original function with respect to its independent variable.
Furthermore, derivative can also imply an imitative or unoriginal work that borrows ideas, themes, or styles from existing literature, art, music, or other forms of creative expression. It suggests a lack of originality or creativity, often used in a critical or dismissive context to describe something that lacks novelty or authenticity.
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1. Relating to or producing derivation. 2. An agent which effects derivation.
A practical medical dictionary. By Stedman, Thomas Lathrop. Published 1920.
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• A word formed from another.
• Taken or formed from an other; secondary.
• A word formed from another word, or which takes its origin from a root; not fundamental.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
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Etymology of DERIVATIVE
The word "derivative" comes from the Latin word "derivatus", which is the past participle of "derivare". "Derivare" is a combination of "de-" (meaning "from") and "rivus" (meaning "stream"). Hence, the literal meaning of "derivare" is "to divert a stream". Over time, the term "derivative" took on a metaphorical meaning, referring to something that is derived or obtained from something else. In the context of mathematics or finance, a derivative is a financial instrument or contract whose value is derived from an underlying asset.
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