GameStop Is Rage Against the Financial Machine

Re:GameStop Is Rage Against the Financial Machine by jacksnipe on Wednesday January 27, 2021 @12:18PM (#25930842)

I'm generally sympathetic to the idea that financial derivatives are a great evil, and a huge part of what feels "broken" about the current system.

However, consider futures, which are very similar to options. Futures were, as I understand it, popularized in Chicago as a way for farmers to be able to get money for their crop right now, at a fixed price. In this way, they could pass the risk -- and a little bit of the profit -- off to people with more capital, who were better able to weather all possible outcomes.

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Re:GameStop Is Rage Against the Financial Machine by croon on Wednesday January 27, 2021 @05:36PM (#25935087)

And in practice, how would that be different from incorporating and selling stocks to those investors, thus raising money now, and then growing in value as the crops are reaped?

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Re:GameStop Is Rage Against the Financial Machine by smabie on Thursday January 28, 2021 @12:12AM (#25938472)

I wouldn't call futures as very similar to options. The mathematical profiles of the two are very different, though a far ITM option is basically a future

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Re:GameStop Is Rage Against the Financial Machine by xmprt on Wednesday January 27, 2021 @06:47PM (#25935814)

Even futures markets aren't protected from this manipulation. The Onion Futures Act has an interesting story.

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