Exchange Traded Derivative

Derivatives represent contracts based on some underlying asset. Futures and options are examples of this type of contract.

You buy an option to purchase 300 shares of NFLX at $400. That type of contract would qualify as a derivative.

An exchange-traded anything is a standardized version of that thing, which can be bought and sold in a marketplace. The most famous version would be exchange traded funds, or ETFs. These funds represent baskets of securities, but trade on the market as a single entity. You can buy and sell them like a stock, even though they can potentially represent stocks from hundreds of different companies.

An exchange traded derivative is a form of options contract that is standardized enough that it can trade in a futures market.

You hear about these trades all the time. When people talk about the price of oil, they are talking about the price of exchange traded derivatives based on barrels of oil. Futures trading is based on these types of contracts, comprising the market for things like gold, wheat, coffee, and dozens of other commodities.

"When in doubt, go long." -Joe Montana