Do not play the derivatives markets unless you can pay for your losses, Securities and Futures Commission deputy chairman Michael Wu says. Speaking on exchange-traded derivatives yesterday, Mr Wu said all financial markets needed a fair amount of speculative participation in order to be efficient. 'The contrarians are the ones that make the market smooth and liquid,' he said. He said speculators who took positions that they could not afford to cover if the market went against them were a threat not only to the market but to society in general. 'These are the high-risk players and are a menace to the system,' he said. 'For the sake of the overall stability of the market there has to be a system to try and keep these players out.' He placed much of the responsibility for ensuring that investors met 'suitability rules' on intermediaries, such as banks and brokers. 'As professionals offering their services, we expect them to assume some responsibility for the integrity of the market place and to play a part in investor protection issues,' Mr Wu said. He denied strict suitability rules and other regulations were responsible for the lack of volume in many of Hong Kong's derivatives markets. 'It's a matter of sentiment. In most markets, for every six instruments launched, only one will be considered a success,' he said. 'Some take time to mature, to deepen.' He said the makeup of Futures Exchange members contributed to the lack-lustre performance of non-equity-based instruments.