jeudi 12 mars 2015
These Americans Are Getting Rich Trading Derivatives Banned in the U.S.
Posted on 21:51 by nice news
The business moves to familiar rhythms of Wall Street: hot leads, cold calls, sales pitches.
It’s noon inside the offices of ForexChile in Santiago, and dozens of salespeople are working the phones, talking up investments linked to everything from Facebook stock to copper futures. They hold out tantalizing prospects to those on the other end of the line: potential returns of 20 percent, 30 percent, even 40 percent.
Familiar, yes -- and illegal if this were the U.S. Because what these people are selling are neither stocks nor bonds nor futures nor funds. They are offering contracts for difference, financial derivatives that are off-limits to retail investors in the U.S. and highly regulated elsewhere.
The scene unfolds daily inside one of the most fashionable business addresses in Chile, where the contracts are perfectly legal and trading in them has exploded. BEFX, another brokerage that sells them, estimates that as much as $14 billion in leveraged trades are made every month. That’s about six times the turnover in the nation’s stocks.
How CFDs became a hot investment game in Chile is a story of savvy marketing and nonexistent oversight. Such contracts are allowed in two dozen other countries and are particularly popular in the U.K., where the value of annual trading is estimated to exceed $900 billion. There, as in Chile, these investments tend to draw small-time speculators. As with get-rich investments
It’s noon inside the offices of ForexChile in Santiago, and dozens of salespeople are working the phones, talking up investments linked to everything from Facebook stock to copper futures. They hold out tantalizing prospects to those on the other end of the line: potential returns of 20 percent, 30 percent, even 40 percent.
Familiar, yes -- and illegal if this were the U.S. Because what these people are selling are neither stocks nor bonds nor futures nor funds. They are offering contracts for difference, financial derivatives that are off-limits to retail investors in the U.S. and highly regulated elsewhere.
The scene unfolds daily inside one of the most fashionable business addresses in Chile, where the contracts are perfectly legal and trading in them has exploded. BEFX, another brokerage that sells them, estimates that as much as $14 billion in leveraged trades are made every month. That’s about six times the turnover in the nation’s stocks.
How CFDs became a hot investment game in Chile is a story of savvy marketing and nonexistent oversight. Such contracts are allowed in two dozen other countries and are particularly popular in the U.K., where the value of annual trading is estimated to exceed $900 billion. There, as in Chile, these investments tend to draw small-time speculators. As with get-rich investments
These Americans Are Getting Rich Trading Derivatives Banned in the U.S.
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