Could You Explain to Your Neighbor How Derivatives Function?

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Could You Explain to Your Neighbor How Derivatives Function?

Many individuals define themselves as e-mini traders. In truth, though, when you trade e-mini contracts you are actually a derivative trader. The massive market failure that transpired from late 2007 through 2009 is widely blamed upon poorly structured derivatives. The futures markets were not usually blamed for the market collapse, but another derivative called a credit default swap and a number of poorly structured forward contracts exacerbated the downward trajectory of the market as Investment Banks were unable to fund the derivatives they had written in this category.

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