• Travel
  • Business
  • Finance
  • Tech
General Blog
  • Auto
  • Business
    • Finance
  • Education
  • Entertainment
    • Sports
  • Health
    • Food
    • Dental Care
  • Home Improvement
  • Lifestyle
    • Fashion
  • Tech
  • Travel
  • Contact Us
  • Home
  • Finance
  • 4 Smart Ways To Earn Profits From Derivatives Market

4 Smart Ways To Earn Profits From Derivatives Market

admin
January 6, 2020 No Comments
derivative market

725 Views

Trading is a risky game. The main reason why people invest in stocks or bonds is to earn quick money. However, there’s no such thing as a free lunch. It requires a lot of expert knowledge, experience and discipline.

Investment in stocks/bonds is facilitated through the National Stock Exchange (NSE), the Bombay Stock Exchange and the Multi-Commodity Stock Exchange. The main exchange markets where derivative market trading takes place. Derivatives are financial instrument whose value is derived from underlying assets like stock, currencies, commodities, market indices and interest rates. The market is highly volatile, where the price is determined by the rise or fall of market value. If you’re looking to invest in derivatives, then you need to have a huge amount of funds to cope with risks. It means you may stand to lose more than your initial investment.

Common types of derivatives:

  • Futures contracts
  • Forwards
  • Options
  • Swaps

Have you invested in stocks lately and haven’t yet earned any profits? Then, it’s time you start making changes in your strategy. Below are some tricks to follow in case of trading in the derivatives market:

Understand trading:

The basic principle of trading is to invest in only those assets that you can understand. If you’re a beginner, then you should start trading in stocks. Make sure you’re aware of the risks that could arise due to market volatility. Understand the risks and then think about returns. In India, futures options (F&O) is the most preferred derivatives asset as they are less risky.

Hedging and transfer of risks:

As mentioned above, derivatives are volatile in nature that make them an uncertain asset. If the price of an asset has fallen, then hedging helps you to protect against the loss. It is basically a practice of capital protection by helping you avert any adverse price movements by trading the asset to another.

In fact, one can transfer the risk by selling an asset to another buyer, who has an appetite to bear the risk.

Arbitrage trading:

Expert traders use many strategies to earn profits and arbitrage trading is one of them. India’s main stock exchanges, NSE and BSE, allow you to buy a stock from one exchange and sell in another to cash-in the profits. When it comes to arbitrage opportunities, the action needs to be quick. Experienced traders usually use software that helps them to detect and implement arbitrage trading in an instant.

Leverage:

Trading with leverage facility gives you exposure to the derivatives market. The biggest advantage of using this option is it maximize the potential profits, as well as the losses. Traders utilize leverage to trade a financial instrument that derives its value from underlying assets, and some of the leveraged products available are options, futures and exchange-traded funds (ETFs).

In India, derivatives have become quite popular among traders and investors. Trading in the derivatives market is the same as trading in the cash segment of the stock market. To start with it, you need to have a demat account, trading account and mandatory margin deposit to begin the trading process.

Post navigation

Top Reasons to hire Offshore Development Centers
TCU Transfer Applicant Checklist that You Need to be Aware

Related Articles

Local Charities

Discover Local Charities on the Wantage Town Community Directory

admin
April 17, 2023April 17, 2023 No Comments
SBI Mini Statement

How to Quickly Access Your SBI Mini Statement

admin
February 22, 2023February 22, 2023 No Comments
Returns From Your ULIP

How To Get Better Returns From Your ULIPs?

admin
August 26, 2022August 27, 2022 No Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *




Recent Posts

Security Camera

Securing Your Space: Expert Security Camera Installation Services

admin - Tech
September 27, 2023 No Comments

With crime rates on a rise in many locations, it...

Staff Transportation

The Importance of Alkhail Transport’s Punctual Staff Transportation

September 22, 2023
Chicken and Fish

Flavorsome Feasts: Convenient Online Chicken and Fish

September 15, 2023
Disposable Cups

Why Disposable Cups Are Becoming Popular ?

September 11, 2023

Categories

  • Auto
  • Beauty
  • Business
  • Dental Care
  • Education
  • Entertainment
  • Fashion
  • Finance
  • Food
  • Health
  • Home Improvement
  • Law
  • Lifestyle
  • Loans
  • Real Estate
  • Security
  • Shopping
  • Smo
  • Society
  • Songs
  • Sports
  • Tech
  • Travel
  • Web Development

Archives

  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • February 2023
  • January 2023
  • December 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • April 2022
  • March 2022
  • February 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • May 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • January 2018

Recent Posts

  • Securing Your Space: Expert Security Camera Installation Services
  • The Importance of Alkhail Transport’s Punctual Staff Transportation
  • Flavorsome Feasts: Convenient Online Chicken and Fish
  • Why Disposable Cups Are Becoming Popular ?
  • Straighten Your Smile: The Importance of Orthodontic Treatment

Recent Posts

  • Securing Your Space: Expert Security Camera Installation Services
  • The Importance of Alkhail Transport’s Punctual Staff Transportation
  • Flavorsome Feasts: Convenient Online Chicken and Fish
  • Why Disposable Cups Are Becoming Popular ?
  • Straighten Your Smile: The Importance of Orthodontic Treatment

Categories

  • Auto
  • Beauty
  • Business
  • Dental Care
  • Education
  • Entertainment
  • Fashion
  • Finance
  • Food
  • Health
  • Home Improvement
  • Law
  • Lifestyle
  • Loans
  • Real Estate
  • Security
  • Shopping
  • Smo
  • Society
  • Songs
  • Sports
  • Tech
  • Travel
  • Web Development

Contact Us

Contact Us

Copyright 2018. All rights reserved | Theme: OMag by LilyTurf Themes