What is the difference between a security, financial instrument, derivative and a financial asset?

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The difference is category.

A derivative is a type of security and a type of financial instrument.

Aside from that, financial asset, security and instrument are roughly the same. The only difference is that they are used to describe slightly different things by convention.

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A security is usually an individual instrument like a stock or a derivative. An asset is the same.

An instrument is can be a fund or a product that was created to be invested in. Whereas an asset is probably more tied to a real world object.

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h/t NormanConquest


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