A trader in the market of futures and options
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Futures and options market today is of great interest to those who are looking for unconventional ways in augmenting their own savings, or income lungs. However, the work of a professional trader in the derivatives market, requires special qualities due to the speculative nature of this market. In addition to the focus on success, commitment, and persistence are needed to handle stress and the knowledge of the basic rules of construction of mechanical trading systems. To effectively sell futures and options, it is necessary, first of all, learn to look at the market a special look. It should be remembered that psychological certainty, an important component of the work, comes only with experience that formed a certain system of trading decisions.
Points trader relying on the derivatives market fundamental and technical analysis, as well as, strict risk management. These components are closely intertwined, their ratio depends on the investment strategy. In the long-term investment, the analysis of fundamental data plays a decisive role. However, because the futures market over the short-term players, the role of technical analysis and automated trading strategies here above. The realization of mechanical trading strategies does not exclude the use of fundamental analysis. Existing software solutions allow you to apply the fundamental data for the construction of such systems. It should, as well, to use technical analysis. Based on the developed sciences and technical analysis models, a trader can choose the right entry point into the market and profit. And finally, the most important component of the private trader "Money Management" or risk management. Exploring the market situation, the investor should choose such moments to enter the market, when the ratio of risk and return is the most successful, and the size of the opening position is crucial. Even the most skilled trader at an elevated level of risk, over time, is doomed to ruin. Derivatives market offers many new opportunities to earn additional profit, or minimize losses. Strategy "hedge" that is, insurance risk, help reduce losses, the simplest of these approaches is to purchase the underlying asset and simultaneously selling futures on it. Arbitration allows skillful player market imbalances for their own purposes. The market also gives the investor the option vast opportunities for the realization of individual options and common arbitrage strategies and hedging objectives, but for x and understanding, of course, necessary mathematical knowledge.
The art of successful trading in the market of futures and options requires a lot of effort and time, the study of the theory and practice of many years, at the same time, as a rule, professional traders have the legal status of an individual entrepreneur, and investment companies licensed for a specific activity.
It is important to remember that professional, attracting funds always discusses with the client all the details of its investment strategy, and also, do not forget about what results he achieved in the last pile.
Strategy for the futures market
Derivatives or derivative financial instruments allow us to conclude the contract for the supply of an asset at a fixed price in the future. Among the most popular traders futures buying that may be some time to get the goods, or just the difference between the amount paid and the market quotes. As well as options, they provide the right but not the obligation, to conclude a transaction within the specified time and at a set price in advance.
The development of the derivatives market in Russia, gives investors opportunities as for the formation of independent futures strategies, and build hedging strategies and arbitrage strategies. Today, investors can effectively both with the single stock futures and index futures with RTS as the market arbitrary financial instruments in terms of liquidity is not inferior to the spot market.
The simplest futures strategy, buying and selling futures, have a lot to do with trading strategies in the spot market, while the cost of the participant of the derivatives market will be much lower than in the spot market, due to lower fares and no need to pay for the depository services, or margin lending. Futures on the RTS index may be an attractive tool for the game on the rise and fall of the entire stock market, and not only on changes in individual stock price. Size Shoulder to transactions in futures is 1:10. More sophisticated strategies involve a combination of buying and selling futures. For example - the strategy of "spread" is the simultaneous opening of the long and short positions in the futures contract, it is used when the difference between the prices of various futures contracts does not correspond generally observed values. Formation of the spread is less risky strategy than just opening a long or short position. On the foreign exchanges, the formation of "spread" the investor makes a smaller initial margin, because in this case the opposite positions offset part or all of the losses of the depositor. With the help of "spread" the investor eliminates the risk of losses related to fluctuations in the general level of prices and expects to make a profit due to variations in the prices, which are caused by private reasons. There are temporal and inter-trade "spread." Time "spread" - is the simultaneous purchase and sale of futures contracts on the same asset with different expiration dates. The aim of the strategy is to try to make a profit due to changes in relative prices of contracts.
A separate role played by hedge strategy. With the help of the RTS Index futures can hedge the risks of the entire Russian stock market, and with the help of paper futures, the specific risks of individual issuers. Buying futures on the RTS index is similar to the creation of a portfolio of fifty stocks in the RTS index calculation base. In addition, with the emergence of futures on the RTS index, it is possible to sell a portfolio identical to the composition of the RTS index.
By combining options and futures on the RTS index, it is possible to create synthetic futures, or synthetic option positions. The difference in the prices of real and synthetic futures and options can be used for arbitrage profit. Experienced investors, using combinations of derivatives on RTS Index futures and options on individual stocks, to create complex strategies with different risk-return ratio, but novice investors such practices should be avoided, since the construction of futures and options strategies requires a deep knowledge of market processes.
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