Why I don't dabble in derivatives

Posted by $ blarman 10 years, 2 months ago to Business
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Not that I have money for investing in stocks either... This just demonstrates how corrupt the market has gotten.

I'm wondering if the market wouldn't be better off if there were just basic stocks (offering dividends) and bonds (offering flat rate payouts) and we did away with all the other chicanery. What say you?


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  • Posted by $ 10 years, 2 months ago in reply to this comment.
    Can you provide a link? Is a "Series 7 exam" some sort of prep for a certified financial analyst or something?
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  • Posted by Abaco 10 years, 2 months ago
    The little video clip is interesting. He reminds me of what my son could be like in 20 years. My son's on the spectrum. Even looks like him. My boy can get super focused on stuff, gets bullied, is way ahead in math. I'm working to instill some ethics in the boy, though.

    Interesting article. Thanks for sharing.
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  • Posted by Abaco 10 years, 2 months ago in reply to this comment.
    One source could be a study guide for the Series 7 exam. Good stuff in there...
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  • Posted by Abaco 10 years, 2 months ago
    Puts and calls are derivatives. I'm in support of them. The rest...not really.
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  • Posted by $ 10 years, 2 months ago in reply to this comment.
    Can you recommend any good reading? I understand the basics of most economic transactions and I understand the basics of commodity orders, but I'm not a day trader. I'd be interested in understanding more about this.
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  • Posted by CircuitGuy 10 years, 2 months ago
    I love dervitives, but I can't work the system because I'm not connected to anyone in the industry and probably am a little less aspie than he is.

    As salta says, I do not think the market would be better off without derivatives. They create liquidity and maybe reduce speculative bubbles by providing an easy vehicle for people to take short positions.
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  • Posted by salta 10 years, 2 months ago
    The commodities market could not function smoothly without derivatives. Without futures markets, only participants who have real storage facilities could buy/sell crude oil, wheat, etc. That would make the market very small and prices very volatile. The massive liquidity of futures markets keeps volatility down.
    I'm not saying you should dabble directly, but you benefit anyway from the high liquidity.
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  • Posted by SaltyDog 10 years, 2 months ago
    One thing I can say with a high degree of certainty is that when the subject is derivatives, dabble is not the word that leaps to mind!
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