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Jane Street barred from Indian markets as regulator freezes $566M

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518 points bwfan123 | 1 comments | 06 Jul 25 14:03 UTC | HN request time: 0.208s | source
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MichaelNolan ◴[07 Jul 25 00:02 UTC] No.44485321[source]▶
Anyone have any recommendations for books/papers/articles (math heavy is fine) that give a good steel man argument for why options and derivatives are beneficial?

I can wrap my head around why/how options for physical commodities give price stability for sellers and buyers. But at first glance I struggle to see how derivatives are beneficial in the equity markets. The argument is that derivatives increase market efficiency (more accurate pricing) over what just a simple buy/sell market would give you right? But how valuable is this increased efficiency? Obviously is super valuable to the people who work in finance, but how valuable is it outside of that context?

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1. mhh__ ◴[07 Jul 25 04:03 UTC] No.44486644[source]▶
In equities for example, an option at a given strike let's you pay a little for insurance i.e. that you will have X amount of cash if SPX is at Y and so on.

This is very important for pension funds and so on because they have fixed liabilities like outflows.

All these things are is a way of moving risk around. Some people want risk, some people want to hedge — it's just as true for wheat as it is for bonds.

It's not so much price as risk.