Derivative Markets

On today’s show we’re taking a look at markets that operate purely like their functioning primary markets, and comparing them with the secondary markets. Primary markets are essentially what it sounds like. If you want to buy tomatoes, you go to the farmer’s market and you buy tomatoes for dinner, and the price for tomatoes is the price you pay. This is a simple primary market.

Many markets operate this way, including real estate. There is a primary market, and that’s all.

But when we are dealing with commodities that are used in the supply and manufacture of other derivative products, there are often secondary paper markets that can often be larger in dollar volume than the primary market.

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Host: Victor Menasce

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