The Basic Dynamics Of The Derivatives Market
Abstract
Derivatives have of recent been the hot topic amongst all
those at all interested in the field of financial. Investment
bankers, government officials, even small time investors all have
an opinion on these financial tools. What I hope to accomplish in
this paper is to cut through much of the complicated mathematical
and economic jargon often associated with discussions on
derivative trading, and present it in a light that can be easily
understood by anyone with even the most limited background in
economics or finance.
I also will look at one particular derivative exchange and
study the methods they employ to assure safe and secure trading.
This I believe will allow the reader to understand why derivatives
have seen explosive growth recently, and why this growth is
necessary for the long term health of an open and expanding
international trading arena.