Previously, he held senior management positions in the equity and equity derivative departments of Bear Stearns, Nomura and Kidder, Peabody in both London and New York.

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Abrams, who started out with Goldman Sachs researching derivative trading strategies and later worked at Credit Suisse and then Merrill Lynch as co-head of US equity derivative trading, founded Titan Capital Group in 2001.

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The company sold a combined equity, bond and derivative product and backed up the conversion feature with a pledge of shares by the insiders, then handed the proceeds of the offering to the same insiders.

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Coupled with that, I do want to say that what I feel is one of the best investments out there for anybody who wants to play the equity markets is actually derivative equities, and that would be a high-yield or junk bond.

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CatEputs (short for Catastrophe Equity Put Option) are derivative contracts that give the insured the right to sell new shares at a fixed price, which the investor promises to buy in the event of a catastrophe.

ECONOMIST: Insurance