Derivative Product Company - DPC

AAA

DEFINITION of 'Derivative Product Company - DPC'

A special-purpose entity created to be a counter-party to financial derivate transactions. A derivative product company will often originate the derivative product to be sold; as well, they may guarantee an existing derivative product or be an intermediary between two other parties in a derivatives transaction.

INVESTOPEDIA EXPLAINS 'Derivative Product Company - DPC'

These companies are involved mainly in credit derivatives, such as credit default swaps, but may also transact in the interest rate, currency and equity derivatives markets. Derivative product companies cater mainly to other businesses that are looking to hedge risks that can include currency fluctuations, interest rate changes and contract defaults.

RELATED TERMS
  1. Financial Analysis

    The process of evaluating businesses, projects, budgets and other ...
  2. Risk Analysis

    The study of the underlying uncertainty of a given course of ...
  3. Swap

    Traditionally, the exchange of one security for another to change ...
  4. Derivative

    A security whose price is dependent upon or derived from one ...
  5. Special Purpose Vehicle/Entity ...

    1. Also referred to as a "bankruptcy-remote entity" whose operations ...
  6. Credit

    1. A contractual agreement in which a borrower receives something ...
Related Articles
  1. An Introduction To Structured Products
    Options & Futures

    An Introduction To Structured Products

  2. The Alphabet Soup Of Credit Derivative ...
    Mutual Funds & ETFs

    The Alphabet Soup Of Credit Derivative ...

  3. An Introduction To Swaps
    Options & Futures

    An Introduction To Swaps

  4. How Companies Use Derivatives To Hedge ...
    Active Trading

    How Companies Use Derivatives To Hedge ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center