Monday December 10, 2007

Derivative trades soar to record $681 trillion in Q3 2007

bloomberg.com :

Derivatives traded on exchanges surged 27% to a record $681 trillion in the third quarter, the biggest increase in three years, the Bank for International Settlements said. Interest-rate futures, contracts designed to speculate on or hedge against moves in borrowing rates, led the increase with a 31% increase to $594 trillion during the three months ended Sept. 30, the Basel, Switzerland-based BIS said today [10 Dec 2007] in its quarterly review.

jsmineset.com :

This is it. If you have not already made preparations, then now prepare to defend yourselves! The 3rd quarter BIS report on global derivatives was just released and the results are shocking to say the least. The report shows derivatives traded globally were up $145 trillion (+27.1%) in just THREE months to $681 Trillion. Since September 30, 2006 derivatives are up $216 trillion (+46.5%).

- Is the amount of "money" represented by these derivatives out there going to blow up or run out of control? Putting it another way, is the financial system going to collapse under the weight of all this paper or do we need to start using scientific notation some time in the future?

When I first heard of derivatives, this could have been called the $300 trillion question. It then became the $450 trillion question. In recent months, $500 trillion. And we know now that it has become the $681 trillion question. Or, would that be the $6.81E+11 question?

(2007-12-10 13:13:12 SGT) [Biz] Permalink

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