What I Learned Wednesday - Derivatives & Options
Join the fun, post what you learned this week, and link up below. The code for the image is located in my sidebar. All I ask is you link back to this post. Oh, and make sure you link to your post and not your blog in general, okay?Okay, so this is not so much what I learned, but what I have not learned Wednesday. My current class is Money and Banking. I like my professor, this is my second class with him. The first was Microeconomics when I first started pursuing this particular degree. But the subject matter is beyond my comprehension, right now. This past week we learned about derivatives and options, futures and currency rate exchanges. I read and re-read and re-read some more. Huh? I am so confused.
All of these actions have to do with hedging. Hedging is just a fancy word for betting against a future event. One that you hope to occur in your favor and make you lots of money in the process. This also is one of the biggie reasons for our current economic, ahem, condition.
Although I understand the basic premise, I have yet to fully grasp the ins and outs of such practices. I do understand the need to guesstimate when dealing with foreign currency exchanges at a future date in time. Aha! Future. This would be considered hedging against futures. But what I do not quite understand is why it all has to be so complicated. It is as if it is written in some code only a select few can crack. Because, quite honestly, even those who handle these transactions every day cannot possibly know all the idiosyncrasies and implications of such transactions.
Sigh. I hope you have done better than me this week. Why not share with a link to your post? Don't blog? Leave a comment instead.
What have you learned this week? Grab the button from my sidebar, then add a link to your post below using MckLinky. Not sure how to link up? Leave a comment or send me an email (or both) and I will happily walk you through it.
