A lot of the talk in this forum (and elsewhere as well) about derivatives is a bit misguided when people start talking about the value of them.

There is a thing as "face value" or "nominal value" which is in the trillions as Itstarted and Republicae-Seditionist have pointed out.

But the market value is much lower.

For example: If I purchase a "call" on a stock with a nominal value of $40 and I pay $2.50 what is the actual value of that derivative? The market value for that "call" changes daily depending on how close the value of the stock is to $40. However, if the value of the stock drops down to $15 (as it has happened with many stocks lately) the value of that call is now $0 or close to it.

So how much have you lost? Did you lose $40??? No, you lost your investment of $2.50.


As far as which company has actually "won" from all these Vegas-style bets??? Only one comes to mind and that is Southwest. They saw the market problem and bought a lot of oil futures up to arond $100 and that is why they were able to steer through the $140 price of oil with little or no cuts to their flight schedule and they did not add extra fees.

A gem cannot be polished without friction, nor a man perfected without trials. ~Chinese Proverb

The early bird gets the worm, but the second mouse gets the cheese. ~Jon Hammond