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Trader Derivatives

Trader Derivatives

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Trader Derivatives

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  1. TraderDerivatives Simon Brown JustOneLap.com SimonBrown.co.za 13th October 2011

  2. Wealth warning • Trading derivatives can offer significant returns BUT also subject you to significant losses if the market moves against your position. You may, in a relatively short time, sustain more than a total loss of the funds placed by way of initial margin. You may be required to deposit a substantial additional sum, at short notice, to maintain your margin balance. If you do not maintain your margin balance your position may be closed out at a loss and you will be liable for any resulting deficit.

  3. Before you start • System • Risk management • Product knowledge • Realistic expectations • Psychology • Equities

  4. Correlation • You want to trade non-correlated assets • BUT confirm the lack of correlation • AND know the product

  5. Market Maker • Buying and selling at fair value • Ensures products tracks underlying • Other traders can get in the ‘middle’ of the market maker

  6. Expiry • Know expiry date • Near dated vs. Further dated? • Does your broker; • close you out? • roll your contract?

  7. Costs • All costs? • % underlying value • Flat brokerage • Roll over costs?

  8. Single Stock (SSF) • Equities • ETF’s

  9. Index futures • ALSI • ALMI • DTOP • FINI

  10. Options • Warrants • Index (including barrier) • Equities • Currency • Commodity • Instalments • Equity

  11. Agri futures • Maize (white and yellow) • Bread milling wheat • Soyabean • Sorghum • Sunflower

  12. Commodity futures • Corn • WTI Crude • Copper • Silver • Platinum • Gold • Licensing agreement with CME Group

  13. Currency Futures • US $ • Euro • Sterling • Australian $ • All vs. The Rand

  14. IDX • Berkshire Hathaway • Apple • Nokia • Shell • Citi • Dell • Rio Tinto

  15. Interest rate futures • Bond futures • Jibar futures • Index futures

  16. Re-cap • WMD • Know you product • Know yourself

  17. ?

  18. TraderDerivatives Simon Brown JustOneLap.com SimonBrown.co.za 13th October 2011