Other Aspects of the Risks What are the risks that derive from usage of derivatives?
? observe that because all derivative instruments are equivalent to combinations of existing securities, they cannot introduce any new or fundamentally different risks into the financial system. What derivatives do accomplish, however, is a facility for transferring these risks, and concentrating their risk management into a few entities. A common classification of the risks in the derivatives area uses three areas (a) risks to individual users owing to mistakes in their positions, (b) risks to the clearinghouse owing to large market fluctuations and (c) risks to the economy from a breakdown of all the markets in the country.
