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.
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