Derivative Type Dimension This dimension identifies what the derivative entitles you to do or obliges you to provide. Options Call An option call is a financial instrument representing a transaction in which the buyer has a 'right' but not an 'obligation' to buy (call) a specified underlying item (real or financial) at agreed contract price (strike price) on or before a specified date if it is advantageous to them, hence asset. The writer of a call has given the buyer the right (but not obligation) to buy from them even if it causes them a loss. Hence the writer has the liability. Forwards Forwards are an agreement between two counterparties to exchange a predetermined amount of an underlying item (real or financial) at a specified future date and at a predetermined price. Swaps A swap is a financial instrument representing a transaction in which two parties agree to swap or exchange some obligation, generally a series of cash flows on differing terms. Options An option is a financial instrument representing a transaction in which the buyer has a 'right' but not an 'obligation' to buy or sell a specified underlying item (real or financial) at agreed contract price (strike price) on or before a specified date if it is advantageous to them, hence asset. The writer of an option has given the buyer the right (but not obligation) to buy from/sell to them even if it causes them a loss. Hence the writer has the liability. Options Put An option put is a financial instrument representing a transaction in which the buyer has a 'right' but not an 'obligation' to sell (put) a specified underlying item (real or financial) at agreed contract price (strike price) on or before a specified date if it is advantageous to them, hence asset. The writer of a put has given the buyer the right (but not obligation) to sell to them even if it causes them a loss. Hence the writer has the liability. Credit Derivatives A credit derivative enables the user to transfer the credit risk of an underlying asset from one party, the protection buyer, to another, the protection seller, in isolation from other risks.