[gcruse]

Derivatives may have higher risk....and produce higher return. At least with buying stock and holding it, the most you can lose is the value of the stock when you bought it. But something as simple as selling short can leave you with unlimited losses. For that matter, anyone brave enough to play the commodities without actually being a floor trader, needs the political wherewithal of a Hillary Clinton to keep from having to bail out when prices drop, because you can't afford to weather the storm, even though if you could, you would win. All this is to say that there are no bad derivatives, just hubristic fools with more money than brains.

[Cicero]

If you buy 50 calls, all you stand to lose is your shirt. If you sell 50 puts, your risk of loss is virtually unlimited. Who knows what kind of derivative positions the thousands of traders at JPM may have gotten into?

[aculeus]

But something as simple as selling short can leave you with unlimited losses.

Yes and when Hillary had her 'Year of Living Dangerously' on the commodities market her very first transaction was to go short on beef futures.

But no one with knowledge of commodities (and the Clintons' ethics) believes she was 'really' trading and 'really' putting her family's net worth on the line.