Amount of Derivatives in the World: 710 Trillions of dollars

The Bank for International Settlements (BIS) just published a statistical study on the amount of derivatives worldwide at the end of 2013, and they reach the astronomical amount of $710 Trillions ($710,000,000,000,000). For comparison purposes, the United States GDP in 2013 amounts to $16 Trillion, or 44 times less. And this mass of derivatives beats by 20% the preceding record, dating just before the 2008 crisis... We hear a lot about bubbles these days, in the stock market, the bond market or in the commodities market, but this one is without a doubt the greatest one.

What is a derivative? It’s a contract between two parties, which value is determined by variations in the price of an underlying asset (bond, stocks, commodities, currencies). It is used to either protect against price or interest rate fluctuations, or to speculate.