With fast, low-cost, easy-access online trading and the lure of tidy profits, ever more private speculators are drawn to America's massive E-mini futures market - while UK day traders are stuck in the Stone Age. But, as financial guru Clem Chambers of ADVFN explains, beware the risky charms of ample leverage.

Warren Buffett, probably the world's most famous investor, called derivatives the financial equivalent of 'weapons of mass destruction'. He wasn't bemoaning long-established simple derivatives such as money or credit cards, but sophisticated financial derivatives.

In general, derivatives are used as insurance - for example, a pension fund may want to hedge its portfolio, so it would buy an index future.