Derivative
Business Concept
David Fiderer: Rewriting History To Blame Tim Geithner: An Incomplete Story Of The AIG Bailout...The AIG Bailout Read More: Aig, AIG Bailout, American International Group, Bailout, Bankruptcy, Banks, Cdos, Credit Default Swaps, Derivatives, Federal Reserve, Finance, Financial Crisis, France, GM Bankruptcy, New York Federal Reserve... In this article: Timothy Geithner, American International Group, Bankruptcy, Hank Paulson, Federal Reserve, Derivative, Ben Bernanke, and Goldman Sachs |
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Huffington Post | 3 days ago
Robert L. Borosage: In The Fed We Trust? Will The Senate Reward The Architect Of The Wall Street Bailout?
...exercise the regulatory powers he had to curb predatory lending, police the Wall Street casino, or crack down on the derivatives that Warren Buffett among others warned were financial weapons of mass destruction. Instead he scorned the...
In this article: Ben Bernanke, The Fed, Income, Financial crisis, and Warren Buffett
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Seeking Alpha | November 17, 2009
Hypocritical? Einhorn Likens CDS to Asbestos
...Buffett too. Buffett blasted derivatives as "weapons of mass destruction," yet he has made billions of dollars (read about Buffett on derivatives) in premiums from writing (selling) multi-year options on various indexes. Derivative...
In this article: David Einhorn, Warren Buffett, Chicago Board Options Exchange, AIG, Goldman Sachs, SEC, and Securities and Exchange Commission
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USATODAY.com | 5 days ago
Gensler helps lead the charge to expose OTC derivatives
Buffett's warning proved prescient when the U.S. housing market collapsed, leaving financial institutions holding billions in derivatives contracts of dubious value, dependent on counter-parties of unknown financial health. The...
In this article: Gary Gensler, American International Group, Commodity Futures Trading Commission, Wall Street, Warren Buffett, Soybean, and White & Case
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Times Online | November 16, 2009
UK banks may face new rules on derivatives
Investment banks' ballooning trade in unregulated derivatives contracts has been seen as one of the reasons for the credit crisis last year which led to the Government bailout of both Lloyds Banking Group and Royal Bank of Scotland.
In this article: Paul Tucker, Bank of England, UK, US, Federal Deposit Insurance Corporation, Royal Bank of Scotland, Berkshire Hathaway, and Warren Buffett
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Houston Chronicle | November 06, 2009
Buffett's Berkshire profit triples
...on the derivatives. Buffett sold the equity derivatives to undisclosed buyers for $4.9 billion, according to his most recent letter to shareholders, and can invest the cash and keep any profit even if he loses the bet. If the four indexes...
In this article: Warren Buffett, S&P, S&P 500 Index, Goldman Sachs Group Inc., Chewing gum, Income, Recession, and Tax
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MarketWatch | November 03, 2009
Buffett gives up Berkshire stock to buy Burlington
...Berkshire's worst ever. General Re, one of the largest reinsurers, had a big derivatives business that took years to unwind, prompting Buffett to famously call derivatives "financial weapons of mass destruction." Gen Re also became...
In this article: Warren Buffett, Burlington, Burlington Northern Santa Fe Corp., American International Group, Tax, and General Re
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Description from Wikipedia:
Derivatives are financial contracts, or financial instruments, whose values are derived from the value of something else (known as the underlying). The underlying value on which a derivative is based can be an asset (e.g., commodities, equities (stocks), residential mortgages, commercial real estate, loans, bonds), an index (e.g., interest rates, exchange rates, stock market indices, consumer price index (CPI) — see inflation derivatives), weather conditions, or other items. Credit derivatives are based on loans, bonds or other forms of credit.
The main types of derivatives are forwards, futures, options, and swaps.
Derivatives can be used to mitigate the risk of economic loss arising from changes in the value of the underlying. This activity is known as hedging. Alternatively, derivatives can be used by investors to increase the profit arising if the value of the underlying moves in the direction they expect. This activity is known as speculation.
Because the value of a derivative is contingent on the value of the underlying, the notional value of derivatives is recorded off the balance sheet of an institution, although the market value of derivatives is recorded on the balance sheet.
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