uregnt

Except Finance "Derivatives"  is used in Mathematics(Calculus) & Chemistry also.

In finance, a derivative is a financial contract with a value linked to the expected future price movements of the asset it is linked to - such as a share or a currency. There are many kinds of derivatives, with the most notable being swaps, futures, and options. However, since a derivative can be placed on any sort of security, the scope of all derivatives possible is near endless. Thus, the real definition of a derivative is an agreement between two parties that is contingent on a future outcome.

A common misconception is to refer to derivatives as assets. This is erroneous, since a derivative is incapable of having value of its own. However, some more commonplace derivatives, such as swaps, futures, and options, which have a theoretical face value that can be calculated using formulas, such as Black-Scholes, are frequently traded on open markets before their expiration date as if they were assets.

Derivatives are usually broadly categorized by the:

• relationship between the underlying and the derivative (e.g., forward, option, swap)
• type of underlying (e.g., equity derivatives, foreign exchange derivatives, interest rate derivatives, commodity derivatives or credit derivatives)
• market in which they trade (e.g., exchange-traded or over-the-counter)
• pay-off profile (Some derivatives have non-linear payoff diagrams due to embedded optionality)

Source:Wikipedia

A very good explanation by Sids..

To say in one line " A Derivative is a contract which derives its value from the underlying asset".