These numbers don't make sense!
From various sources, approximate:
- Size of the entire world economy = $80tn
- Global equity market size = $37tn
- Global bond market size = $83tn
- Global derivative market size = $800tn (10x size of the entire world economy)
How can this be? If the entire world economy is just $80tn, where are the underlying assets for all these securities? Do these numbers make sense? Can anyone give me a plain english explanation of how this is?
There are derivatives on commodities
leverage?
Notional Value
It is notional value of contracts, many of which can easily be levered 100x if desired
There are also derivatives on currencies and interest rates. Most likely due to notional values.
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