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RE: All Of The World's Money And Markets In One Visualization

in #money7 years ago

Money isn't 'stored' in derivatives. The notional value of derivatives (what is displayed in the graph) is the potential value the derivatives could have, if the transactions they are hedging go bust.

The face value of derivatives is about $20T, which is the value 'stored', or expended for them, in the normal course of business - meaning the markets they are hedging don't go bust.

That's a very simplified explanation of derivatives, which is hampered by the very diverse nature of the instruments. I hope it helps you to understand how there can be such a huge 'notional' value of derivatives.

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