No doubt this is pure speculation. However, derivates are not only used as a hedge, though that would be a prudent use. That's why people laugh at the term "hedge fund. " You hear the terms net long and net short all the time. That's because these guys are often not hedging. A perfectly hedged position realizes little or no profit. They are overweight one side or the other, because that's how huge gains are made. I'm not looking at the markets right now, but I'm sure there is plenty of derivative action right now. That's the case every day. I agree that it would be crazy for custodians like BlackRock or Fidelity. Little hedge funds? Maybe.