Derivatives

I understand that I expose myself as both a nerd and a pre B-school “non-finance” person when I say this, but up until just a few weeks ago, my knowledge of derivatives came mostly from listening to This American Life’s Planet Money episodes about the recent economic downturn.

Then came this semester’s Options class. And then today, derivatives showed-up in Fixed-Income Analytics.

Part savvy financial insurance, part Tooth Fairy-like invention, part middle-school geometry: derivatives have kind of blown my mind. And with position names like “Protective Put” (see above) and “Covered Call” it seems the people who enjoy working with derivatives also get a kick out alliteration. (Which is surprising to me for some reason.)

I am still trying to wrap my head around derivatives; lets hope I get the hang of them by the time mid-terms roll around…