Today's action seems a bit like the climax of derivative index action in 2008 where the big banks and financial mastadons were caught in the downdraft--owing trillions on these index bets that they could never pay off.
Here's hoping today's market is just a mild mini-version of the Giant Correction and Uncle Sam will not be called on to cover losses incurred by the Big Boys.
They keep letting them invent more bets and hedges when nobody understands all the intricacies. Owning anything like described is probably a hedge. So when the hedge side loses it should mean the hedged position gains. Except in cases where people were buying them to sheer speculation such as day traders and gambleholics.
They ought to do away with these complex derivatives altogether. They’re just a type of ponzi scheme where people who weren’t even participating get hurt because their bank or investment house took a large position on the losing side.