Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
A derivatives product is… what exactly?
This final note today — on the theory that news of business and the economy can be dense, an explainer.
Interviewer: So what exactly is a derivatives product?
Trader: Derivative products are a lot about leverage.
Interviewer: Got it. So what is leverage exactly?
Trader: A lot of leverage is about maximizing your margins.
Interviewer: OK, so how would you define “margins?”
Trader: Yeah, margins really come into play when talking about derivatives.
Interviewer: OK, so what is a derivatives product?
Trader: They’re kind of like stocks.
Interviewer: For our listeners who aren’t well versed in finance, what are stocks?
Trader: They fluctuate. Stocks definitely fluctuate.
Interviewer: What does that mean exactly?
Trader: It means that the market is cyclical.
Interviewer: And by “the market” you mean…
Trader: Buy low, sell high.
Interviewer: I’m sorry, what?
Trader: Supply and demand.
Interviewer: Excuse me?
Trader: Nature versus nurture.
Interviewer: Nature versus…
Trader: Mi casa es su casa.
Trader: Mi casa… es… su casa.
Interviewer: You don’t even know what derivatives are, do you?
Maybe. Maybe not. Our skit was written by Insanitas Comedy. Michelle Philippe and Jonathan Karp brought it to life.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.