What is an Offshore Derivatives Instrument?

Answer 1

Offshore -- off the shore of your local country. In other word, in another country

Derivatives - instruments or products that derive their value from its underlying security. Examples: options (calls, puts), future contracts etc. Sometime you will hear it being referred to as alternative investment.

Instrument - in this contexts refers to an investment product or method.

Make sure you read the prospectus carefully before deciding to invest. Offshore could also mean the investment is managed oversea which could be less regulated and thus less protection for your money.

Answer 2

derivatives are instruments like options and futures contract ,they derive thier value from the value of an underlying contract, in your case when you off shore this investing option then it is called an offshore derivatives instrument , offshore means another country , this instrument is gaining popularity because the financial protectionism and control is being reduced across the world , this leads to intelligent investing as you can invest in right markets even though you are not thier.