There is very little regulation in this market. Insanity. "Wilmott estimates the derivatives market at $1.2 quadrillion, to put that in perspective it is about 20 times the size of the world economy." If it collapse so will everything else in a very short time. https://seekingalpha.com/article/4046338-derivatives-explode-like-bomb
There are no stupid trades for them. If they lose to much taxpayers must pay. To big to fail. Socialism for the rich.
This has been the problem with derivatives all along. Not only approving of but also allowing the insuring of gambling (which is what derivatives basically are) was a dismal capitulation to avariciousness. The problem is that we all accept the reality of "their" game. "We" don't need "them" and their silly game of bean counting and hiding. If "their" system failed tomorrow and "they" lost everything yet common people simply continued with real, essential work (wealth production), we could forget about "them". They would just have to do without their Lamborghinis and caviar.
You think it's regulation that will solve the problem? Sometimes Central Bank ("the Fed") intervention is what causes the problem.
So basically the financial services industry creates a product that is some complex people can't understand it. And then speculators pour in because it seems to be increasing in value, more than anything else.
That's a very interesting statement. Someone could write an entire book about that, with that one statement as its thesis.