Clearing and Settlement of Derivatives

2

Derivative products

‘Derivatives’ is the generic term used for a whole host of products that

are traded either as listed products on an exchange or as bespoke,

tailored products negotiated over-the-counter (directly between the

counterparties).

There are many thousands of derivative products yet most of

them fall into categories that identify the underlying such as ‘inter-

est rate’, ‘commodity’ or ‘currency’, or the specific instrument char-

acteristic such as ‘interest rate swap’, ‘cocoa futures’, etc. This

categorisation is then used to produce everything from statistics

(Table 2.1) to identifying the ...