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Posted by azotic on September 21, 2008, 12:33 am
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Until recently, most people had never even heard of derivatives; but in
terms of money traded, these investments represent the biggest financial
market in the world. Derivatives are financial instruments that have no
intrinsic value but derive their value from something else. Basically, they
are just bets. You can "hedge your bet" that something you own will go up
by placing a side bet that it will go down. "Hedge funds" hedge bets in the
derivatives market. Bets can be placed on anything, from the price of tea
in China to the movements of specific markets.
http://www.webofdebt.com/articles/its_the_derivatives.php
Looks like all bets may off when congress decides to regulate these funds.
Best Regards
Tom.
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