Hair dryer
Financial instruments are derivatives of underlying reality. A share of stock in Apple Inc. represents fractional ownership of Apple’s offices and intellectual property and the cash flows from its business. An Apple option represents a bet on the future price of that Apple stock. An S&P 500 index fund represents a collection of claims on 500 companies’ stocks. A Treasury bond represents a claim on the US government’s future ability to collect taxes. A Treasury futures contract represents a claim on the future delivery of a Treasury bond. Oil futures represent the future value of crude oil drilled ...