Net investment hedge gains and losses Gains and losses on derivatives used for specified risk management purposes Gains and losses on derivatives related to market-making activities and other derivatives Credit derivatives (a) Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in the mortgage pipeline, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income. (b) Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue. (c) Primarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue. (d) The prior period amounts have been revised to conform with the current period presentation. Credit derivatives are financial instruments whose value is derived from the credit risk associated with the debt of a third-party issuer (the reference entity) and which allow one party (the protection purchaser) to transfer that risk to another party (the protection seller). Credit derivatives expose the protection purchaser to the creditworthiness of the protection seller, as the protection seller is required to make payments under the contract when the reference entity experiences a credit event, such as a bankruptcy, a failure to pay its obligation or a restructuring. The seller of credit protection receives a premium for providing protection but has the risk that the underlying instrument referenced in the contract will be subject to a credit event. The Firm is both a purchaser and seller of protection in the credit derivatives market and uses these derivatives for two primary purposes. First, in its capacity as a market-maker, the Firm actively manages a portfolio of credit derivatives by purchasing and selling credit protection, predominantly on corporate debt obligations, to meet the needs of customers. Second, as an end-user, the Firm uses credit derivatives to manage credit risk associated with lending exposures (loans and unfunded commitments) and derivatives counterparty exposures in the Firm’s wholesale businesses, and to manage the credit risk arising from certain financial instruments in the Firm’s market-making businesses. Following is a summary of various types of credit derivatives. The Firm makes markets in derivatives in order to meet the needs of customers and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. All derivatives not included in the hedge accounting or specified risk management categories above are included in this category. Gains and losses on these derivatives are primarily recorded in principal transactions revenue. Refer to Note 6 for information on principal transactions revenue. The following table presents pre-tax gains/(losses) recorded on a limited number of derivatives, not designated in hedge accounting relationships, that are used to manage risks associated with certain specified assets and liabilities, including certain risks arising from the mortgage pipeline, warehouse loans, MSRs, wholesale lending exposures, and foreign currency denominated assets and liabilities. (a) Certain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The Firm elects to record changes in fair value of these amounts directly in other income. (b) Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. For additional information, refer to Note 23. (c) The prior period amounts have been revised to conform with the current period presentation. (d) Represents the effective portion of changes in value of the related hedging derivative. The Firm did not recognize any ineffectiveness on net investment hedges directly in income during 2017 and 2016. 195 JPMorgan Chase & Co./2018 Form 10-K Derivatives gains/(losses) recorded in income Year ended December 31,  (in millions) 2018 2017 2016 Contract type Interest rate (a) $ 79 $ 331 $ 1,174 Credit (b) (21) (74) (282) Foreign exchange (c) 117 (107) $^{(d)}$  (20) $^{(d)}$  Total $ 175 $ 150 $^{(d)}$  $ 872 $^{(d)}$  The following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre- tax gains/(losses) recorded on such instruments for the years ended December 31, 2018, 2017 and 2016. 2018 2017 2016 Year ended December 31, (in millions) Amounts recorded in income (a)(b) Amounts recorded in OCI Amounts recorded in income (a)(b)(c) Amounts recorded in OCI (d) Amounts recorded in income (a)(b)(c) Amounts recorded in OCI (d) Foreign exchange derivatives $11 $1,219 $(152) $(1,244) $(280) $262