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Strategies & Market Trends : The coming US dollar crisis
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To: HH who wrote (11722)9/24/2008 3:24:13 PM
From: Real Man  Read Replies (2) of 71456
 
Yes, the zoo of derivatives got extremely large, so there
are lots of different animals now. The simplest basic
contracts are futures and options (although even the latter are
not so easy to value starting from underlying asset).
Here is a reasonably good (and brief) introduction. You can click
on the specific contract for an explanation

en.wikipedia.org

Some animals are also more beastly than others
In general, notionals on interest rate SWAPs are pretty far from
the real value of the contracts, and can never get that high.
For a CDS, however, notional value becomes real value in
the event of default, which is why insurers such as AIG, ABK,
MBI got murdered.
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