One thought on “Derivatus Paradoxus.”

1. Taviani, Carlo says:

   4 years ago at 13 h 53 min

   In the last slide of the series “2 – Predicting and predetermining”, you wrote: “Derivatives derive their values from the evolution of the underlyings”.

   I call the moment in which a future is signed “date U2” and the evolution of underlyings “moment Z”. How can derivatives derive their values from a moment Z which comes after the date U2? I suggest that derivatives do not derive their value from “the evolution of the underlyings” (Z), but from a forecast on the evolution of the underlyings (C at the date U1).
   A (a piece of signed paper) counts as B (Y’s promise [at the date U2] to purchase goods G from X on date D at price P regardless of the actual value V of G on that date*) in the context of C (X and Y’s forecast at the date U1 which precedes the moments U2, Z and the date D).

   Is my comment wrong?

   Note that U1 and U2 are close in time but are two different moments, the first precedes the second; they are the forecast and the promise.

   *I am quoting your sentence, but see my insert in square brackets

   Thank you.

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