Risk takers

There is a wise use of derivatives for hedging, and a risky use of derivatives for speculation. There must be speculation in the markets to provide liquidity, however, those that are speculators should fully acknowledge that. Where individuals and companies get into serious trouble is by starting out with the idea of risk reduction and either through greed or error, they morph into risk takers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s