The nature and criteria of classification of derivative financial assets


Derivatives - a special group of securities, which are set by law and the details of the undertakings as a result of which there is a transfer of ownership of the underlying asset or the calculations are based on the price (value) of the underlying asset.

Structural features in derivative financial instruments are as follows:

• certification of the rights arising from the possession of the main paper (certificate of stocks, bonds);

• providing additional benefits the owners of the securities (warrants, the warrant);

• the operation of the main paper (coupon)

• predicting the dynamics of exchange and insurance of owners of securities of the downward (futures, options);

• the possibility of replacing the main paper surrogate form (share certificates and bonds, depository receipts);

• ensuring penetration of the main paper on foreign stock markets (depositary receipts).

Criteria for inclusion of a financial instrument to the group of:

• dependence of the price directly or indirectly on the price or performance of the underlying asset

• standardization of the conditions to the obligations of financial instruments;

• availability of a suite of documents that have one underlying asset, the same maturity period and the period of the obligations;

♦ compliance with the volume and quality of the underlying asset specified standards.

Derivatives may be: registered or bearer, short medium and long - term, and without validity. They are: market and non-market, public and corporate, commercial, stock, share and bonds, mutual funds and speculative capital-intensive, commodity-monetary and regulatory.

In practice, financial markets often use such derivative financial instruments:

1. Options.

2. Futures.

3. Depositary Receipts.