To: Leaning Right
It’s only “insurance” if you have an insurable interest. With a derivative, I buy $10 “insurance” against MS stock dropping but I don’t own any MS stock and you promise to pay me $500 if it drops 20 points.
This is why derivatives were outlawed after the 1929 stock market crash (you had to have an insurable interest) but the Wall Street gamblers brought them back in the 1990s.
17 posted on
09/28/2014 8:06:44 PM PDT by
RetiredTexasVet
(Every trash can has a lid, the DNC lid is Debbie Wasserman-Schultz (aka Debbie Dipsh!t))
To: RetiredTexasVet
I buy $10 “insurance” against MS stock dropping but I don’t own any MS stock... You're right! What started out as a somewhat reasonable "insurance" scheme has morphed into a casino-type betting system.
And when the house (the big banks) can't pay after a bad run, the taxpayers will step in to make everything whole again.
18 posted on
09/28/2014 8:13:28 PM PDT by
Leaning Right
(Why am I holding this lantern? I am looking for the next Reagan.)
To: RetiredTexasVet
Should Conservative support making Derivative illegal?
31 posted on
09/28/2014 8:48:04 PM PDT by
4rcane
To: RetiredTexasVet
t’s only “insurance” if you have an insurable interest. With a derivative, I buy $10 “insurance” against MS stock dropping but I don’t own any MS stock and you promise to pay me $500 if it drops 20 points. And the guy who is offering to pay the $500.00 doesn't have to have the $500.00 to write the insurance.
56 posted on
09/28/2014 10:47:50 PM PDT by
stig
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