by Carl Norell, NASDAQ OMX

What do you think will be the most important derivatives trends over the next few years? Increased regulation of hedge funds and other users of derivatives, plus an extension of the classes of assets and new markets that one can access via derivatives. If you were investing your own money in derivatives, what would you be looking for now? I think that exposure to commodities will continue to be a sound investment, both in the short and the long term. This derivatives market will grow over the next 20 years, with more and new investment options to choose from. Today the commodity derivatives market is dominated by the institutional investors, but over time it will become more accessible to private investors like you and me, and I would look for access to commodities exposure via derivatives contracts available to private investors.

What was the best question you got following your presentation?
The one comes to mind was about what comes first; model or price? What this question is referring to is a classic ‘chicken and egg’ paradox, i.e. which one of these two factors is ultimately responsible for the valuation, and what is the interrelation between them? Is it the broker on the trading floor that sets the price, or is it pre-determined by the financial models used by the investors? People use models to set prices and people use prices to extract model parameters in an eternal game of leapfrog that has never been properly answered.

Finally, what are your impressions of Derivatives Week and the city of Stockholm?
Derivatives Week is a great event, and I think the format where speakers don’t have to compete with each other in different streams is terrific. It benefits both speakers and audiences. I also like the way in which the speakers are given ample time to do our presentations, followed by decent breaks where the audience can digest what has been presented, and ask questions one-to-one. As for Stockholm I am very impressed by your city. I was fortunate enough to be here over the record warm weekend, and I love those long, light summer nights. The sky in the east starts to lighten before the western sky is fully dark, and it's quite wonderful.