| From Thehindubusinessline.com: A derivative, goes its definition, is an instrument which derives its value or strength from its underlying assets. On this touchstone, option in a share is a derivative just as share futures are. Why, even a share itself, come to think of it, is a derivative deriving as it does its strength from the value of the undertaking(s) of the company issuing it.
A unit of a mutual fund derives its value from net asset value (NAV) which is nothing but the current market value of all the shares and securities the scheme has invested in as increased by the income if any that has accrued and as reduced by all the liabilities and ultimately divided by the number of units participating in the scheme..............................................Full Article: Source
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