Most people don’t understand what derivatives are. Unlike stocks and bonds, a derivative is not an investment in anything real. Rather, a derivative is a legal bet on the future value or performance of something else. Just as one can bet on the horse, or the outcome of a sports game, financiers in London and New York make multi-billion dollar bets on how interest rates, foreign exchange rates, and share prices will perform in the future; or on what credit instruments are likely to default.
“Competition is a sin”. The Rockefeller family motto.