I think it’s more like: I have some paper that says I own 50% of a box T. People are willing to pay up to 10 cents to get 1% of that box T, so if I gave my paper to them, they’d give me $5. I want to buy another box X for $1, so I go to a bank and ask for $1. To make sure I pay, I give them a paper saying they can take 10% of my original box T if I don’t pay them back.

I build another box A and people get excited. They say they’ll pay 5 cents for 1% of it, and I have a paper that says I own most of it.

Time passes and the amount people are willing to pay for the boxes changes, and at some point people are close to not believing box T is worth 10 cents per 1%. If that happens, the bank will want their 10%!

To prevent that, I decide to sell box X to box A. I pick the price I want for the sale, but the important part is that I make sure box A writes a new paper saying that the bank now has to get 20% of box A if box A fails to pay them, not box T anymore.

In the end, I can’t say I own box X anymore, but I never cared much for it. I only bought it as a meme. That’s okay though, because I don’t need to give any of my box T to the bank, and people are willing to pay 8 cents for 1% of my box A since it now owns box X too.

This is awesome. Now do stock options and every other derivative.

It's more like:

I have a box with $5 and you have a box with $5. We agree to merge our boxes into one and now we both have 1 box with $10.

Plot twist: me and you are the same insane person.

Also, you don't actually have $5 in either box, but you once sold a 1% ownership stake in each box for 5 cents. There's only 10 cents in the in the merged box, but you value it at $10.

Many numbers in this sphere can seem arbitrary:

https://www.nytimes.com/2022/04/14/business/elon-musk-420-tw...

https://www.businessinsider.com/elon-musks-humor-jokes-over-...