Yes very dangerous. This is making fake real. Worse, can amplify real too. Long ago, back of envelope computation show real is amplified because of such derivatives. Using Apple’s market cap of $900B, the affected real money is more than $900B, could be $1T, $1.8T or $3T (figures are made up for impact, didn’t do any computations) because of futures, options, margin and whatever phony instruments based on AAPL.
Because people underestimate the multiplier effect. I called that “fake make real” money… may be I should copyright the terms Mortgages, HELOCs, and similar make the house prices very real. It could be considered “paper” only if the house is full paid with no mortgage in which case whatever the price of the house won’t impact the owner (assuming not selling forever).