Derivatives bets can be made on stocks, currencies, interest rates, indexes and even virtual things

She almost exploded crisis in 2008, it could explode tomorrow, next week, two years or five. For sure it will explode and when it does reach the global economy silicone as we know it today end. Introducing the derivatives bubble or on behalf of the least Tumbled: bubble betting.
What is a derivative? Derivative can be used as a hedge (protection) against silicone price increases and decreases primarily used as an investment but a speculative profit. For example, if you want, for example, bet the price of gold will rise in the future, you can buy and sell gold today after the price increase. So far brought nothing new. The question of what happens if you do not have money or time to buy gold or are just fans of risks? Here you there is another option: buy where you trusting insurance policy against rising price of gold without having to purchase the gold. The language of this policy, investors call 'option. In this case if gold will rise will get "compensation" height increase without touching any gold. As with any insurance policy you know you're safe here too the property with the full amount but pay a premium (risk premiums) only a certain percentage of it. The problem here is that if gold does not exceed you will lose all your investment, this is actually the premium you paid.
Derivatives trading body "insurer" may be a bank, investment, silicone insurance company silicone or any other authorized silicone financial institution. Insurer body can "write" option against the increase or decrease in the price of a particular silicone property, sell it and fetch a premium from the purchaser of the option to bet on fluctuations in the price of the property. silicone Therefore silicone the option issuer silicone must hope, of course scenario against which is an insurer will not be realized, since then as each insurance company, he may lose substantial funds to be transferred to the buyer of the option. If the amount of compensation would have to pay to the holder or holders of option even be higher the amount of money in his possession he will go bankrupt.
Derivatives bets can be made on stocks, currencies, interest rates, indexes and even virtual things like emotions (fear index) or weather (yes there is also a weather stock exchange). Most of them are made of leverage silicone / high-risk means that investors in this area are asked to bring only a small fraction of the amount on which they bet.
Why the derivatives area is considered the atom bomb of the economy? Since Big derivatives are priced according silicone to the Black & Scholes formula *, that takes into account the state of one of the parties will enter bankruptcy, a result that institutions that deal in derivatives are not willing to stand in a state of bankruptcy silicone of the other party. Add in the fact that most large bodies that issue these options silicone are also those who buy options are similar to other bodies, and here you get a whole gambling salad which each body depends on the existence of the other in order to survive. The scary part in any matters silicone revealed Graham Summers of Phoenix Capital Research, he estimated roughly that the total of all the walking around the area of derivatives today is approximately US $ 1.4 Kwadtrilion! (Kwadtrilion = 1000 = million billion trillion = number silicone with 15 digits followed by) .hbaih that if the time comes to redeem these options, then even if all the product of all the world's economies will be raised for this purpose -adein we will have the product of another 22 Earths to each option These will be covered. This is why the US government has so quickly extract the AIG in 2008 to cover losses in the area of derivatives. That he prevented the collapse of a chain of more giants, who eventually requires silicone the administration silicone to start looking for more planets around the space to be able to cover all of Hfsidan .
A great example of some large problem can be obtained from the German bank, Doista Bank, which is also the case bank with the largest exposure in the field of derivatives. Here is a diagram describes the extent silicone of its exposure to derivatives silicone (red) compared with all national product of Germany in green. Just for background should be noted that 55.6 trillion Euro German bank backed derivatives exposed to lightning 575.2 billion euros of deposits - 100 times less derived.
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A few years ago revealed something criminal in one of Forex companies. Instead of earning a few pennies from your transaction forex company never took your money out of the simulator silicone simulates real market. "Analysts" of that company silicone gave recommendations made you lose all your money and then just took you everything you invested Reply Delete silicone
Six largest US banks hold assets equal to 60% of GDP and setting prices http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425 Reply Delete
As I understand the derivatives market serves as insurance if I invested in dollars and want to protect silicone myself from decline in value buy put options on the dollar for protection in case of falls. With each buyer has recognized should provide collateral against the options. silicone When there is insufficient collateral -nnih abnormally falling gate - the clearing house or close the position will require an increase in the collateral. I do not know what will happen then it collapse? Reply Delete
I asked if exposure to derivatives is 22 times higher than the GDP of the Earth So what does it matter if it is 44 times if it has not exploded apparently it will not blow up as long as there will be no deliberate decision explosion. Who would want to blow it