Derivatives - GAAHHHH!!!
Firearm & Gun Forum - FireArmsTalk.com > General Discussion Forums > The Club House > Derivatives - GAAHHHH!!!

Reply
 
LinkBack Thread Tools Display Modes
Old 08-20-2013, 04:02 PM   #1
FAA licensed bugsmasher
FTF_SUPPORTER.png
Feedback Score: 0 reviews
 
ScottA's Avatar
 
Join Date: Apr 2010
Location: Davenport,IA
Posts: 6,775
Liked 2143 Times on 1166 Posts
Likes Given: 773

Default Derivatives - GAAHHHH!!!

Derivatives make a lot of news. They are often derided as the insidious instruments of Snidely Whiplash. And they have the reputation of the instruments which are sure to result in the downfall of the worldwide economy. But what really are derivatives?

http://youtu.be/Wjlw7ZpZVK4

__________________

Scott

Quote:
If you're not representing Jesus in a way that makes people want to hang out with you, you're doing it wrong.
Quote:
Those who refuse to participate in politics shall be governed by their inferiors. -Plato
Regent Holdings What you need to know about silver, gold, and the economy.

Join the NRA
ScottA is offline  
2
People Like This 
Reply With Quote

Join FirearmsTalk.com Today - It's Free!

Are you a firearms enthusiast? Then we hope you will join the community. You will gain access to post, create threads, private message, upload images, join groups and more.

Firearms Talk is owned and operated by fellow firearms enthusiasts. We strive to offer a non-commercial community to learn and share information.

Join FirearmsTalk.com Today! - Click Here


Old 08-21-2013, 01:07 AM   #2
FTF_SUPPORTER.png
Feedback Score: 0 reviews
 
Join Date: Aug 2011
Location: Detroit,mi
Posts: 2,798
Liked 870 Times on 525 Posts
Likes Given: 193

Default

you're over thinking this

We have smart people in Washington and Wall Street that know what they're doing.

This is not the legal scam your are looking for.

__________________
partdeux is offline  
 
Reply With Quote
Old 08-21-2013, 01:26 AM   #3
Devil's Advocate and Provocateur
FTF_MODERATOR.png
Feedback Score: 0 reviews
 
TekGreg's Avatar
 
Join Date: Jul 2011
Location: Cincinnati,OH
Posts: 1,872
Liked 1324 Times on 693 Posts
Likes Given: 607

Default

Actually, I knew a VP of trading at one of the top five investment bankers on Wall Street. He was sent to a one-week long class to learn about derivatives, what they were, how they worked and who should invest in them. He told me he had just returned from this class in which they worked very, very hard - and he admitted that he still did not understand derivatives! This is something that an individual investor should learn VERY well before investing any money. You will probably NOT find any advisors that are well versed in the ins and outs of this instrument.

__________________

.
.
“Malo periculosam, libertatem quam quietam servitutem." (I prefer the tumult of liberty to the quiet of servitude.). Thomas Jefferson

"All that is necessary for the triumph of evil is that good men do nothing."

-Edmund Burke, Loosely translated from Thoughts on the Cause of Present Discontents. (1770)

TekGreg is offline  
texaswoodworker Likes This 
Reply With Quote
Old 08-21-2013, 03:54 PM   #4
Feedback Score: 1 reviews
 
Join Date: Feb 2011
Location: Reno,Texas
Posts: 10,211
Liked 6563 Times on 3635 Posts
Likes Given: 27929

Default

What are derivatives? These are derivatives.



Do you want to learn what integrals are too?

__________________
texaswoodworker is offline  
ScottA Likes This 
Reply With Quote
Old 08-21-2013, 04:23 PM   #5
Feedback Score: 1 reviews
 
Join Date: Feb 2011
Location: Reno,Texas
Posts: 10,211
Liked 6563 Times on 3635 Posts
Likes Given: 27929

Default

Just looked into financial derivatives. Definitely looks like something that'd be a headache.

__________________
texaswoodworker is offline  
 
Reply With Quote
Old 08-22-2013, 12:24 AM   #6
FTF_SUPPORTER.png
Feedback Score: 0 reviews
 
Join Date: Aug 2011
Location: Detroit,mi
Posts: 2,798
Liked 870 Times on 525 Posts
Likes Given: 193

Default

Derivatives are actually very easy to understand.

It's a financial mechanism to hedge (aka bet) protecting your position vs someone else position

Kinda like black jack, house wins 49%, betters win 49%, house gets 2%.

HOWEVER, and this is where it gets interesting. Both sides of the "bet" are insured by the same "book". And where it gets really interesting, the book dives into making the bets. Here you have the book (aka too big to fail global bank), making bets, insuring both sides of the bets, and generally creating their own market they are making money on.

Over simplification, yes, but nonetheless accurate.

__________________
partdeux is offline  
2
People Like This 
Reply With Quote
Reply

Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Firearms Forum Replies Last Post
Kalashnikov Platform Review:The truth about AK47 and it's derivatives Mark_Van_Goth General Rifle Discussion 21 06-05-2013 03:23 AM