/biz/ - Business & Finance

>VVIX spike
Now we’re having fun

>>58519372
If buying a stock is like buying a car, derivatives are like car insurance. You pay a small fee for a plan that pays out if your initial purchase loses a certain amount of value within a specified amount of time. The problem is that you can buy insurance on your insurance, paying another fee to get paid out if your insurance doesn't pay out. You can also get insurance on someone else's insurance, paying a fee to get paid out if they don't get paid out, and this chain can go on indefinitely as long as people are willing to pay the fee to pick up the insurance policy. This is called "the derivatives market" and every major bank has literally quadrillions of dollars in derivatives that they cannot pay out if there's a cascade failure in the market.

>>58510726
It means war is coming and everyone is picking a side.

I feel it coming.