By contrast, your neighbors, who bought real insurance on a real vehicle, get only its Blue Book value (and, one hopes, a chastened child). This explains the primary problem with swaps.

While ETFs are not derivatives, they build on the philosophy of indirect investing that underlay the derivatives revolution; think of them as “Derivatives for Dummies.” They also create a self ...

Derivatives, unlike other financial assets, are not regulated. In the stock market, there are restrictions on how much you can borrow against your assets. Insurance companies also are regulated.