What Is a Derivative?
Updated 21 days ago (March 6, 2026)
A derivative is a contract between two or more entities, and the value of a derivative is based on another asset. Common derivatives include futures, options, and swaps. A derivative is useful to mitigate your risk, or to take on additional risk with the potential to earn additional payout.
Financial Disclaimer: Tellus provides this content for informational purposes only. This is not financial advice. Financial returns and mortgage terms vary based on individual circumstances and market conditions. Consult a qualified financial advisor before making financial or borrowing decisions.