Dividing hedging and gambling: Legal implications of derivative instruments
The past three decades have seen the emergence in themarket of many different types of “derivativeinstruments”, ranging from futures, forwards, options,and swaps1 to some other hybrid instruments2 orsynthetic transactions3 . Along with insurance,derivative instruments help market participants notonl...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2006
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| Online Access: | https://ink.library.smu.edu.sg/sol_research/2609 https://ink.library.smu.edu.sg/context/sol_research/article/4567/viewcontent/VfPHedgingGamblingPDF.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | The past three decades have seen the emergence in themarket of many different types of “derivativeinstruments”, ranging from futures, forwards, options,and swaps1 to some other hybrid instruments2 orsynthetic transactions3 . Along with insurance,derivative instruments help market participants notonly to hedge various types of risks but also to engagein market speculation. A derivative transaction couldserve the purpose of avoiding large losses (i.e. hedging)as well as earning a windfall (i.e. speculation). As such,one question arises: Is there any difference betweengambling and derivative trading? |
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