Well, assuming arguendo your argument is valid, what happens when the price of oil inevitably collapses (historically it’s cyclical) and ole JP and others are broke and out of business like Lehman Brothers.
Your derivative is now toilet paper correct?
“What makes risk so risky?”
You buy insurance on hour home and on your car don't you? What happens if there is a major earthquake in your city and your insurance company declares bankruptcy and doesn't pay? Your insurance was a derivative. It was a hedge against a financial loss.
Someone was saying conservatives should ban derivatives. But if you own 500 shares of stock and you sell a covered call option on it? We're suppose to ban that activity? A covered call is a derivative.
The government insures your savings account up to 100k so you won't have loss. We gonna ban that activity too?