Name a Common Type of Financial Derivative That Is Analogous to a Security Token

A common type of financial derivative analogous to a security token is a stock option. A security token represents ownership or a financial interest in an underlying asset, similar to how an option contract derives its value from an underlying asset like a stock.

Both are financial instruments whose value is not inherent but derived from something else. The option gives the right, but not the obligation, to buy or sell.