to a financial instrument whose value is resulting from a commodity named as underlier

A financial derivative refers to a financial instrument whose value is resulting from a commodity named as underlier.

contracts that base their value on an underlying asset

Financial derivatives, as mentioned above, are contracts that base their value on an underlying asset.

a contract that specifies how payments or financial assets are exchanged between two parties based on the value of an underlying financial asset

A financial derivative is a contract that specifies how payments or financial assets are exchanged between two parties based on the value of an underlying financial asset.

financial instruments that are linked to a specific financial instrument or indicator or commodity, and

Financial derivatives are financial instruments that are linked to a specific financial instrument or indicator or commodity, and through which specific financial risks can be traded in financial markets in their own right.

a contract between two parties that specifies conditions under which payments are made between two parties

At its most basic, a financial derivative is a contract between two parties that specifies conditions under which payments are made between two parties.

the most common application of “smart contracts” and one of the easiest to implement in code

Financial derivatives are the most common application of “smart contracts” and one of the easiest to implement in code.

cash flows that are conditioned stochastically and discounted to present value

From the economic point of view, financial derivatives are cash flows that are conditioned stochastically and discounted to present value.