What are derivatives
Posted on Nov 10, 2000 08:15:27 AM
Derivatives are financial derivatives. The best known are futures and options. They are available and a private investor. In fact, there are many other types of derivative financial instruments, but most of them are only available to professional market participants. I guess most of you never even hear their names, not to mention the fact that they use.
Derivatives, regardless of their names and structures have two characteristic properties. The first is that they can be used both for hedging or for speculation. Hedging allows you to avoid or minimize potential losses in the event of adverse changes in market conditions. The second feature is the presence leveradzha or simply speaking, the “shoulder”. That is, you operate the amounts significantly exceeding your own money.
Derivatives, can be very useful for a reasonable use. However, due to the aforementioned shoulder can lead to significant losses in speculation. I do not advise them to start selling pre-detail without addressing all of their benefits and risks. It is also highly desirable, I would say is necessary to have at least some practical experience of trading in financial markets. Well, for example, the stock market.
derivative market, hedging, most speculation, title,- Results for derivative market
- The choice of mutual fund
- Results for hedging
- Results for most speculation
- Results for market fund