Editing Openai/68ed2ed1-5644-8004-ba30-42213bf3dbfa (section)

===== The notional value represents the total theoretical amount of the underlying assets that all the world’s derivatives are based on. =====

Think of it as the “pretend” pile of money that the contracts reference — not what’s actually changing hands.

Example:
* You and I make an interest rate swap on a $100 million loan.
* We agree to exchange the difference between a fixed and a floating rate.
* That $100 million is the notional value — but neither of us actually pays or receives $100 million.
* We’re just swapping the difference in interest payments (say, a few hundred thousand).

So that $729.8 trillion figure means:

: 

But again — it’s not real exposure. It’s like counting every dollar in every bet ever made, not just the money that might actually be won or lost.