Derivatives
A strategy expressed through instruments whose value derives from an underlying — options, futures, swaps — where the derivative structure is itself essential to the return rather than incidental to it.
Why it matters
The classification that most often conceals rather than reveals. A strategy is not a derivatives strategy because it uses futures; it is one when the payoff shape, the convexity or the volatility exposure is the point. Volatility risk premia belong here because there is no cash instrument that expresses them.
What it is not
These are routinely confused with Derivatives. The distinctions are not pedantic — each one has consequences for how a system is governed.
Derivatives frequently provide leverage, but leverage is a sizing decision available through many instruments.
Relationships
Typed edges into the rest of the ontology. These are what make the canon traversable rather than merely readable.
| Verb | Target | Meaning |
|---|---|---|
relatedTo | Risk premium | An association too weak or too general for a stronger verb. |
relatedTo | Protection | An association too weak or too general for a stronger verb. |
Record
| Canonical identifier | QIS-TERM-00036 |
| Status | Canonical industry term |
| Adoption | Widely used |
| Domain · Layer | Strategy families · Capital |
| Origin | Standard classification; describes the implementation instrument rather than the return source. |
| Semantic aliases | None recorded. |
| First published | 2026-08-02 |
| Last reviewed | 2026-08-02 · 180-day cycle |
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