Derivatives let investors trade an asset’s attributes without the asset itself

Evidence

A financial instrument to hedge or speculate on price movements by dismantling any asset into individual attributes and trading them without trading the asset itself. Derivatives take the form of financial contracts such as futures (an agreement to buy/sell an asset at a predetermined price at a future date), options (the opportunity but not the obligation to buy/sell an asset at a predetermined price at some point in the future), and swaps (allowing for the exchange of one asset flow for another), though they often involve a combination of all three. These contracts “derive” their value from an underlying asset such as commodities, equities, currencies, debt, mortgages, interest rates. Derivatives, in combination with leverage, have come to be the key form of speculative capital over the past few decades. — Andrew deWaard, Derivative Media, 486

Categorization

• DEFINE: Defines derivatives’ core innovation: dismantling an asset into attributes tradable without the underlying asset.
• corroborated: 2 independent passages support this claim — Andrew deWaard, Derivative Media: How Wall Street…, 486
• XREF: connects to: Derivatives let investors tailor risk exposure precisely and have become tradable commodities themselves — Max Haiven, Cultures of Financialization, 478; Spreading lets average traders exploit option mispricing without stock positions — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 733; Derivative markets enable corporations to shed physical assets while retaining economic control — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1181 (+2 more)