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Futures and Options contracts are not "over the counter derivitives".

Correct. They are exchange traded derivatives.

The are an etherial, self-delusional agreement between 2 parties which 'gives the appearance' of a no-lose investment.

Really? Neither side can lose? That must mean that neither side can win.

Bank of International Settlement puts the notional value of current derivitive contracts at about 1.5 Quadrillion dollars. The earth and all that is in it does not come close to the current dollar valuation of 1.5 Quadrillion.

So what? Notional value tells you almost nothing about the amount at risk.

As long as their value remains notional everything is fine, but when counterparty claims are made, it will be next to impossible to stop the carnage.

That's a silly claim. Notional value remains notional, no matter what.

Right now, the dollar is leveraged 20:1.

Huh? Makes no sense.

That is how much debt that is out there.

Huh?

It can only continue as long as the public remains ignorant about about these matters..

We'll see these silly claims until the public gets educated.

Options and Futures are leveredged products, but they are highly regulated.

But they're derivatives!!

or in the case of options, the options expire worthless, and the seller derives the benefit.

You mean one side gains and the other side loses? Just like in OTC derivatives?

What about interest rate swaps? Are you scared of them too?

What I am "scared of", as you put it, is the ability of one entity to engage in leverage which will put the entire economy at risk. Credit default swaps, derivitives all hold that potential. As I said, as long as notional remains notional value we are hardly aware of their existence. It is only when that notional value is demanded by the counterparty claims that the chain reaction could hold great danger, not only for that bank, but the entire economy. When the freewheeling, wild west, trading agreements, flying under any radar until it crashes the economy is my concern.

I have read many of your posts on many threads. You are a smart guy. But you and I will have to agree to disagree as to the danger which over the counter derivitives hold for our economy.

Thanks for the commentary.