, Columnist
The Job Is Service But the Goal Is Monetization
Also Elon Musk’s SEC case and wearables data for insurance.
One model is that some trades want to be done with a lot of leverage. Here’s one:
My risk, in this trade, is very low. If the value of the Treasury bond goes up or down, it doesn’t matter to me: I’ve promised to deliver it to you at a fixed price in a year, and you’ve promised to buy it from me at a fixed price in a year. I no longer have any real exposure to the price.2 Maybe I have some credit risk to you — what if you don’t pay me in a year? — but in practice this is very small, because we do this trade on an exchange with a clearinghouse that requires us to post daily margin, so there should always be enough money for you to pay me for my bond.