Having successfully disassembled assets in order to price and trade their attributes, derivatives have two key functions, according to Bryan and Rafferty: binding and blending. Particularly through options and futures, derivatives “bind” the future to the present through pricing relationships; with swaps, they “blend” different forms of capital, through corresponding asset forms, into a single unit of measure. “It is . . . the capacity for derivatives to [be] commensurate [to] capital in different forms, locations and time horizons that adds greater competitive discipline to the processes of calculation and decision making.”

DEFINE: Explains Bryan and Rafferty's two core functions of derivatives: binding (options/futures linking future to present pricing) and blending (swaps commensurating different capital forms into a single measure).

Andrew deWaard, Derivative Media, loc. 170