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An Easily Understandable Explanation of Derivative Markets

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    An Easily Understandable Explanation of Derivative Markets

    Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later.

    She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

    Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in Detroit...


    An Easily Understandable Explanation of Derivative Markets

    #2
    That is a pretty good explanation.
    My other blog is Your Organized Friend.

    Comment


      #3
      Yeah, yeah, that is pretty much my understanding, too. I'm amused, disgusted, and baffled, all in one.
      "There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid

      "It is easier to build strong children than to repair broken men." --Frederick Douglass

      Comment


        #4
        Hahaha, what a terrific and humorous read! And yet... sad at the same time.

        Thanks for sharing.

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