Buffett Says Stock Ownership Became More Attractive With Tax Cut

Re:Buffett Says Stock Ownership Became More Attractive With ... by JumpCrisscross on Wednesday January 10, 2018 @11:47AM (#16116477)

> the exchange is exchanging between two parties, and skimming off the top

Nobody wants to run a credit check every time they buy an option. That just turns the premium into a fancy loan.

If you buy an option on an American options exchange, it is cleared by the OCC [1]. They are everyone's counterparty. There is a long chain of people who have to default for you not to get your money. (Basically, the financial system has to melt down in a nation-state ending way.)

I have no idea how Bitcoin options are being handled, but suffice it to say, counterparty risk dominates any other component.

[1] https://en.wikipedia.org/wiki/Options_Clearing_Corporation

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Re:Buffett Says Stock Ownership Became More Attractive With ... by elhudy on Wednesday January 10, 2018 @12:44PM (#16117066)

Thanks for the info, that makes a lot more sense. I suppose I was under the impression that bitcoin exchanges would be under the same regulations as regular exchanges, considering they are operated by the same large american companies (e.g. CME)

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Re:Buffett Says Stock Ownership Became More Attractive With ... by UweSchmidt on Wednesday January 10, 2018 @02:21PM (#16118007)

Whoops, that couldn't be further from the truth. A lot of what these exchanges do would be super illegal in the real world!

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