Web Winners |

Posted: April 08, 2007

Derivatives - often-esoteric financial instruments invented to minimize investors' risks - are a huge and complicated business, and the tussle to own the industry's massive Chicago Board of Trade put us in search of helpful Web sites.

CBOT battle. The Chicago Mercantile Exchange offered $8 billion for the Chicago Board of Trade (CBOT) in October. A subsequent unsolicited bid by Atlanta-based IntercontinentalExchange Inc., valued at $9.9 billion, is the subject of predictable criticism on the Mercantile Exchange's site:

IntercontinentalExchange is an electronic futures market. Its motto is "Trade the world." Here is its Web site:

Derivative defined. Try figuring out what an ethanol calendar swap contract is. A primer on derivatives, this site is helpful in defining terms and sorting out the differences among, for example, commodity derivatives, financial derivatives, and exchange-traded derivatives.


Options guide. The derivatives known as options come with a lingo of their own - call and put, strike prices, being in or out of the money. This site is one place to begin learning the language and risks of this form of investing.

Derivative history. If anything about derivatives could be entertaining, this is it. Titled "A brief history of derivatives," it begins with a story from Genesis, where Jacob agrees to trade seven years of labor for a bride. His future father-in-law later "defaults," giving the story another first. The history then leaps about 3,500 years, to the Dutch tulip bulb mania of the 17th century, and a trend was born.

CBOT battle II. The CBOT site explains the financial market's history, dating to 1848. The site lists some training sessions that sound odd to the uninitiated - such as the one titled "In through the out door," which is described as covering "the relationship between the trader's emotional state and his need to liquidate open positions." The mind reels.

Contact staff writer Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

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