What is an Equity Derivative?

A derivative is an alternative financial instruments or contract that derives value from the performance of an underlying entity; (e.g. indices, assets, or interest rates) and vary in relative value accordingly. Derivatives, such as options, credit default swaps, interest rate swaps, futures, Collateralized Debt Obligations, and Mortgage Backed Securities are often implemented to alter exposure to the underlying entity, so as to attain leverage  or hedge against risk, access otherwise inaccessible assets or markets