"the $600 trillion US-listed derivatives market." can somebody tell me WTF does this mean exactly? there's $600 TRILLION of something listed in the US?? Of what??
Mostly derivatives of derivatives of derivatives. The US-derivatives market is by far the largest legal pyramid scheme in the history of mankind.
ha! well, I can conceive of $600,000,000,000,000. but as being "listed"?? so what are they talking about, the value of all the companies that list all stocks, bonds and futures? or the value of ALL transactions?
Well, as a former buy-side derivatives quant, I might be able to clarify a bit. "US-listed" refers simply to those OTC derivatives -- various flavors of structured notes, swaps, swaptions, options, etc. -- where at least one of the counterparties is a US entity. The number itself -- plausible enough, though I've no way of judging how accurate it is -- refers to the estimated combined value of all those OTC derivatives. No connection to the value of the companies themselves or their publicly issued securities. What's your source, anyway?
U.S. options exchanges currently being sued on anitrust grounds. Second time for this. Also go to the "Memory Hole" for a leaked SEC report on the U.S. option exchanges. Major bad stuff. One exchange deliberately falsified documents to the SEC to cover up its illegally activities to thwart arbitrage between the exchanges. Without question, the SEC cannot regulate the plain-vanilla, listed, derivatives markets. And this should be the simplest case for enforcement. We may be sitting on a time bomb, as Warren Buffett suggests. Nobody would know.
"US-listed" refers simply to those OTC derivatives -- various flavors of structured notes, swaps, swaptions, options, etc. -- where at least one of the counterparties is a US entity. The number itself -- plausible enough, though I've no way of judging how accurate it is -- refers to the estimated combined value of all those OTC derivatives. Question for you. So, what exactly are those items (derivatives) exchanged and traded OTC on this basis? More importantly, can the market be easily tapped by retail traders? If so, how? Or, which broker(s) would typically give you access? Are we talking stocks, futures, bonds, US gov debt, and shares or interests in just about every other monetary thing created including hybrid real estate instruments? Shares of private equity funds? My source was an article that mentioned the 600t. I think there is more info about it here. Overall, to me, when a market has $600T of anything 'listed' it sounds like a blast! The liquidity and volatility!! I trade currencies in the forex, the biggest 'market' on earth (so I thought) and I WISH we had 10-times the volume and volatility we do. That is why I tuned in to the $600t. The ForEx exchanges less than $500t "US-listed" derivatives market. I would just like entry. I'd love to trade whatever is in it! As long as there is matching liquidity. I'll probably get a book on it.
It's a meaningless figure since it is based on $600 trillion of underlying asset value. It has no meaning on the potential exposure of the market : If I sell puts on $1mm of IBM, I buy calls on $1mm of IBM at the same strike - we get $2mm of derivatives. But really it's the same exposure as being long only $1mm of IBM. It also has no meaning on the market value of the traded volume. A put on ABC struck at $0.01 when ABC is trading at $100 is worth about zero, but if I buy 100 of those puts, I have traded $1mm of underlying asset value but nearly zero of market value.
yep ---- paper on top of paper written on top of paper on top of paper ----------- to almost infinity!