The Ethical Economy of the Market for Derivatives: Trading with Values Derived from Other Values for Hedging, Speculation, and Arbitrage
It is useful to differentiate between the market for derivatives and the markets for credit and capital, despite the existence of some structured products which blend elements of credit-market and capital-market products – collateralized debt obligations, for instance. Share options are the classic example of capital-market derivatives, and interest-rate swaps the classic example of credit-market derivatives. Given the more complex nature of the market for derivative products, it seems appropriate to treat this market separately as a market in its own right, even if there are also credit-market derivatives, capital-market derivatives, and hybrid derivative products that can be seen as hybrids consisting of credit-market products and capital-market products, although they are not hybrid securities in the narrower sense, as convertible bonds are.
KeywordsUnderlying Asset Gross National Income Derivative Market Convertible Bond Collateralized Debt Obligation
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