Sorry you are wrong. MBS is not classed as a derivative. As pointed out above it's actually a structured finance product. But anyway as a simple sum of underlying cash products it's still a cash product (you pay upfront cash equal to the notional of the instrument)

A stock option on the other hand is most definately NOT a cash product, although the underlying is. The stock itself is not traded , it's just a financial contract whose value is a function of the stock price.