Financial derivatives were instrumental in the development of global financial markets, providing new ways to offset, distribute, and speculate on risk -- and ultimately transmitting losses throughout the financial system. How did this market become so systemically important while being so minimally regulated? This paper answers that question through an interpretive analysis of public speeches and legislative testimony about derivatives by U.S. and U.K. regulators from the early 20th to the early 21st century. Many approaches to political economy regard financialization as inevitable, because of ideology or material power. However, I find that public regulators neither unquestioningly embraced derivatives nor viewed them as antagonistic to the public interest before some moment of capture. I show that the lack of public regulation prior to the crisis was the result of a series of political decisions rooted in shifts in how derivatives were interpreted. Disagreement over the interpretation of these products is at the heart of regulatory debates: Do derivatives primarily minimize financial risk or exacerbate it? Does their complexity ensure they will not be used by "unsophisticated" investors or does it mean investors will not understand the risks they are taking? These interpretive questions have significant regulatory implications, and the goal of this paper is to understand the processes through which actors who had the power to regulate the derivatives market came to regard an unregulated market as legitimate. This paper focuses on four critical junctures when the debate around the legitimacy of derivatives shifted, starting with the 1936 Commodities Exchange Act, which set the terms of derivatives regulation well into the era of financialization, and ending with the 2010 Commodity Futures Modernization Act, which prevented the public regulation of OTC financial derivatives markets, setting the stage for the next eight years of regulatory laissez-faire, culminating in the 2008 financial crisis. While the period of self-regulation immediately prior to the financial crisis was largely uncontested, this paper reveals that it was preceded by conflicting interpretations of derivatives and the public interest and explains how this taken-for-granted attitude toward financial self-regulation came about. These moments of contestation testify to the incompleteness in a process of financialization that is often depicted as unidirectional and monotonic.