What are derivatives traded on the stock market?
Exchange derivatives are common derivatives such as options or futures that investors buy and sell through a centralized stock exchange that regulates transactions. This is unlike the shimmering market for over -the -counter derivatives, in which prices are determined by buyers and sellers without the interchange. Investors who invest in exchange derivatives speculate on the price of securities that are the basis of contracts. Such investments that include futures and options contracts require less capital and offer greater flexibility than typical stock trading.
The derivative market is an ever -growing market that allows investors to engage in securities without actually buying real participating assets. For example, someone who buys shares in a company actually buys a share of ownership in this company. On the other handLoaded and sold without actually owning shares in the company. Derivatives traded on the stock exchange are for investors a way to participate in this market, and at the same time benefit from the transparency of the central exchange regulating all shops.
It is important to realize that all derivatives traded on the stock exchange must undergo serious control from the stock exchange, which means that the possibilities for investors are more limited than what they could overcome the counter. However, they will benefit from being able to monitor derivative prices in real time for market exchange. In addition, the number of derivatives that meet regulatory standards are always growing.
By using derivatives traded on the stock exchange, the investor can have access to some securities with blue chips that he will not otherwise be able to afford. This is because the prices for Derivs Mares are usually only a small percentage of the price of the basic security. Investors can also quickly fromAbout and emerge from derivative profits, unlike a relatively long period, which lasts for reserves to become profitable.
Options and futures are two main types of contracts on the exchange traded on the stock market. When the investor buys the possibility, he has the right to buy or sell shares of basic security when he reaches a price known as a strike price, even if he is not obliged to apply this possibility. On the other hand, the futures holder is obliged to buy or sell basic security shares at the current market price in the future at a certain predetermined point. With the possibility of futures investors speculate about the expected movement of basic security prices.