4 ms·
A future is not an "exotic" derivative, it's a "vanilla" product. Futures are mainly OK because there is no custody nor settlement of the underlying itself. Ev
by Galanwe 4y ago
A future is not an "exotic" derivative, it's a "vanilla" product.
Futures are mainly OK because there is no custody nor settlement of the underlying itself. Everything is settled in cash.
In this respect, cash settled (inverse) crypto futures could almost be considered as having no link whatshowever with crypto currencies. This fine point is actually what allowed brokers to propose crypto futures ahead of any regulation.
- steveBK123 4y agoExactly, futures are essentially the most vanilla and ancient derivative product in the world. Hammurabi's Code references them as does Aristotle. The earliest uses have been primarily agricultural, allowing farmers to sell grain in advance for cash now and use that cash to fund operations in order to grow the grain.