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Derivative is a financial instrument whose value depends on the market value of some underlying asset.  The parties to a derivative contract essentially make a bet on the value of the underlying asset. Depending on the change in value for the underlying asset, one party will usually owe something of value to the other.  Derivatives can be used to hedge against market fluctuations. 

Derivative also refers to something that is created from or connected to another. In the context of copyright law, a derivative work is any work that has been modified from or produced from earlier work.

In the context of the acquisition, a derivative acquisition is one that is derived or gained from another. A derivative acquisition is different from an original acquisition in that an acquisition was never the property of another in the original purchase.

[Last updated in August of 2022 by the Wex Definitions Team