Repayment of Financial Derivatives

In creating a financial derivative, the means for, basis
of, and rate of payment are specified.

Payment may be in currency, securities, a physical
entity such as gold or silver, an agricultural product
such as wheat or pork, a transitory commodity such as
communication bandwidth or energy.

The amount of payment may be tied to movement of
interest rates, stock indexes, or foreign currency.

Financial derivatives also may involve leveraging, with
significant percentages of the money involved being
borrowed. Leveraging thus acts to multiply (favorably
or unfavorably) impacts on total payment obligations
of the parties to the derivative instrument.