The Ethical Economy of the Market for Derivatives: Trading with Values Derived from Other Values for Hedging, Speculation, and Arbitrage
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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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