A derivative is a financial instrument whose value corresponds to the value of some other underlying asset (or some benchmark). For example, a contract to pay $100 for a barrel of oil today is not a derivative, but a contract that pays out the spot price of a barrel of oil on May 1 (or an agreement to buy a barrel of oil for $100 on May 1) is a derivative since the value of the second contract corresponds to the value of an underlying asset. Event contracts are an example of a derivative, since the value of the event contract corresponds to the value of some underlying (like whether the Library of Congress has reported whether a bill has passed). The global size of the derivatives market far exceeds the value of their underlying spot markets, sometimes by several orders of magnitude.