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Derivatives Made Easy

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For many in the media and the general public, 'derivatives' is a dirty word. The negative attitudes toward to derivative stems in large part from misinformation. Most people don't know the social purpose of derivative contracts. And why are derivatives important?

The main purpose of derivatives is to reduce and hedge risk. Many businesses and individuals are exposed to financial risk that they would like to get rid of. For example, airline companies can hedge against rising oil prices by going long on crude oil future contract. Thus derivatives allow users to get rid of risk.

But who takes on this risk? This is where speculators and traders come in. They take on the risk with the expectation of making a profit. They are needed for proper function of the market. Without them, market in not liquid, and hedgers can't reduce their risk. But to operate as a trader in derivative market you need a proper knowledge and understanding of the derivative subject.

This is what we aim to do, provide our readers with in depth knowledge on subject. We aim to guide our readers to capitalized the opportunity that the derivatives provide. We share with our readers on how derivatives can help them protect against market crash and also how it can help to generate regular income. To know on...

Options and Earnings Announcements

Asad Dossani discusses how to trading options when companies release earnings announcements... Read More

The Difference between Gold and Silver

Asad Dossani discusses the difference between gold and silver. We do this by examining the gold to silver price ratio over the last 20 years, and learning how this moves depending on the market condition at the time. And these findings can lead to excellent trading strategies... Read More

Using Options to Generate Income

Asad Dossani discussed an options trading strategy you can use to generate income.A covered call strategy is an excellent way to generate income, while giving up potential upside.It works particularly well when we expect a stock to rise, but not significantly... Read More

Protect yourself from a Market Crash

Asad Dossani discusses how to protect yourself from a market crash using a protective put option trading strategy. A protective put buys an out of the money put option on the market. It behaves like an insurance policy. It pays off when markets crash, and loses money if markets go up... Read More

How to Trade Options

Asad Dossani discusses how to trade options. The first in a series of articles discusses a basic example of how an option works, the greater possibilities of options trading as compared with futures... Read More

Why We Need Derivatives

Asad Dossani discusses why we need derivatives. Derivatives are useful primarily for hedging purposes. Traders are also needed to ensure that markets are liquid and prices adjust in an efficient way... Read More

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