Derivatives: Financial derivatives are broadly defined as instruments that derive their value from the performance of the underlying equity, commodity prices, interest or foreign exchange rates. Derivatives come in various forms and shapes, including futures, forwards, options, structured debt obligations and deposits, and various combinations thereof. These leveraged products have become an integral part of financial markets and are being used by various organizations, including banking and nonbanking financial institutions and business houses. These have been used to reduce business risks, expand product offering to customers, trade for profit, manage capital and funding costs, and alter risk reward profile of a particular item or an entire balance sheet.
In Indian context derivatives especially options are new products not well understood by many. These products are used both by RISK AVERSERS for hedging their positions and RISK SEEKERS for speculations for some extra profits. Individuals and Financial planners too can use these Options as wealth protection instruments for themselves and their clients. Let us see some of the advantages of use of options.
Cost efficiency
Higher percentage returns
More Strategic Alternatives
If we understand the behaviors and pricing of options and the synthetic derivatives well, innumerable possibilities are available for protecting assets, and converting our loosing position to a winning one. However one needs to have full control on his money management, emotions of fear and greed and have patience
We at UHWC help the traders to be a consistently successful profit making trader by efficient use of options. In case you want to be a successful profit making trader, contact us at UHWC for courses on Derivatives
