For many traders, options trading has become a really stable source of income. There are several reasons for this phenomenon - limited risk, unlimited income, chances to trade even with a small amount on the account, as well as the possibility of using combined strategies. But in order to make money in this field, it is desirable to obtain the necessary set of knowledge. One of the proven ways to get information is to read useful literature. On the best specimens, we will focus special attention. Generally, good books options trading on domestic market- it is a rarity. I hope that this article will allow you to quickly make a choice and start working with options.

Book number 1. John Hull "Options, and Others"

John Hull is one of the most famous experts in risk management and the stock market. In this book, the author introduces his readers to the market of futures, options and a number of other useful tools. The first edition was placed on only 300 pages. The latest versions of the book are more impressive and have more than 1000 pages. Many experienced traders call this book a real derivatives encyclopedia. It provides the most important theoretical and practical knowledge about futures, options, types of markets, and so on. The author managed to combine and describe in detail all the most interesting strategies. In addition, the book describes the option pricing model, features of volatility smiles, Greeks, and so on.

Book number 2. Mikhail Chekulaev “Risk management. based on volatility analysis.

The book of a talented author is mainly devoted to risk management and the features of its assessment. Naturally, all this has been considered in relation to options trading and a number of other related instruments. Emphasis is placed on what key factor success for every trader and investor is learning money management, understanding the essence of the risk management system. On the pages of the book there are practical recommendations on how to find the right balance between risk and profit. In addition, the author gives the best volatility strategies and teaches how to put them into practice.

Book number 3. Lawrence Macmillan. "Options as a strategic investment"

For many options trading enthusiasts, this book is a real “bible”. It has everything you need for successful trading in the stock market. If we take all the Russian-language literature on this topic, then the book by Lawrence Macmillan is definitely in the top five. The author tried to compress his knowledge as much as possible, which resulted in a thick book with a volume of more than a thousand pages. This book is perfect for beginner traders. It describes what options are, reveals the essence of their main types and types. An impressive part of the book is devoted to the most popular strategies, including various delta and vega neutrality. Most importantly, Macmillan, as a successful trader with thirty years of experience, can really be trusted. For a trader or investor, this literature will be very useful.

Book number 4. Lawrence Maxmillian. "Maximallan about options"

This book on options trading appeared almost one of the first on Russian market but that makes it even more valuable. This is a unique guide that contains all the most useful for the modern trader. The author tells how to work with the main trading tools, gives examples of successful trading, including his own experience. I would like to point out that this book is not entirely for beginners. To understand it, there must be some experience in options trading and understanding the essence of this instrument. But even for beginners, it will be very useful, because the most popular terms are deciphered on the pages of Maximallan on Options, the secrets of option trading in indices, stocks and, of course, futures are given. The book does not contain full descriptions of trading strategies, but it allows you to form the necessary basis for your independent development. In addition, it has many other interesting things - break-even point calculations, recommendations for maintaining option positions, the maximum amount of practical knowledge, and so on. This literature will be very useful for already practicing and experienced players who prefer to work on American exchanges.

Book number 5. Simon Vine Options. Complete course for professionals

Many traders have heard about this book. It reveals the main secrets of using not only options, but also a number of derivative instruments. Again, the author wrote the book with the expectation of more experienced traders who have already felt the taste of trading and the bitterness of defeat. On the other hand, beginners should not put this book aside either, because it contains a number of interesting theoretical exercises and useful tests with answers. This will allow you to better understand the essence of the information you read and test your memory.

Book number 6. Chekulaev Mikhail. "Mysteries and secrets of option trading"

Actually, already by the title of the book it is clear what the author is going to share with his readers. That's right - it reveals the most important secrets of options trading. Mikhail Chekulaev has a unique trading experience. He is considered one of the best masters of options trading and risk analysis. The author managed to cover all the most important areas of trade, consider the most effective methods analysis and only proven strategies. The book "Mysteries and Secrets of Option Trading" is great for both market experts and its pioneers.

Book number 7. Kevin Connolly "Selling and Buying Volatility"

The peculiarity of this book is in its brilliant content. It teaches the trader one of the best strategies based on selling and buying volatility. By the way, the well-known science editor- Mikhail Chekulaev. Over the years of his working career, he managed to write several high-quality books and interesting articles on options trading, which are listed in our list. By the way, the strategy described in the book is more suitable for trading masters. But it has a lot of useful information for novice traders who are just starting their journey. The main advantage of the book is the most simple language and the absence of complex formulas.

conclusions

Today, books on options trading are not in short supply. It remains only to choose the appropriate literature and devote a little time to obtaining basic knowledge or advanced training.

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Currently, futures and options are the most important and liquid financial instruments in the futures market. In many ways, they are similar, but at the same time they have fundamental differences.

Let's talk more about options and futures. In doing so, we will use plain language which will be clear even to novice investors.

Futures are contracts (agreements) for the sale and purchase of a certain amount of a selected asset, which must take place strictly on a certain date in the future and occur at a price agreed upon at the time of their conclusion.

The two parties in such transactions are buyers and sellers. In this case, the buyer has an obligation to purchase a certain amount of the asset. In contrast to this, the seller has an obligation to sell it accordingly on the agreed date. Thus, both parties to a futures transaction are limited by mutual obligations.

Each futures has predetermined information about the type of asset, size, terms of the agreement and price.
The etymology or origin of the term in question itself has an obvious reference to English language. Future in English means future.

At the same time, it is important to understand important feature futures agreement. Until the specified period has expired, the party to the contract has the right to cancel the obligations assumed. This can happen in two ways. Firstly, it can sell this futures contract in the case when it was previously purchased. Secondly, she can buy it in the case when it was originally sold.

Futures trading is a kind of investment process in which there are real opportunities to speculate on the constantly changing dynamics of quotes or the value of the underlying asset.

An asset under a futures contract can be different kinds goods. For example, it could be:

• about wood;
• gold;
• oil;
• cotton
• grain;
• become;
• currency;
• and much more.

Every day traders from different countries enter into millions of thousands of transactions for the sale of all the above goods. At the same time, such trading in the vast majority of cases is purely speculative. Simply put, every trader tries to buy goods at a low price and sell them at a higher price. The situation in which traders, when purchasing futures, are going to receive or provide the asset specified in it is extremely rare.

What is meant by options

Options are contracts (agreements) according to which their buyers have the rights to buy or sell a certain financial asset at a specified price on a specific day in the future or earlier.

An option differs from a futures in that the former gives rise to the right to dispose of the underlying asset, and the latter the obligation to complete a purchase and sale transaction.

Futures can act as option assets. Call options generate the right to buy them, and Put options, respectively, to sell them. That is, futures and options are interrelated instruments.

Buyers or, as they are also called, option holders, at their own discretion, can exercise the right to exercise the contract at any time. In such a situation, the transaction for the purchase and sale of the futures is fixed at a cost that is equal to the strike price of the option. In other words, the option is exchangeable for a futures contract.

When a call option is exercised, its holder becomes the buyer of the futures contract, and the seller becomes the seller of the futures. When a put option is exercised, its holder becomes the seller of the futures contract, and the seller becomes the buyer of the futures.

Each of the parties to the option, as in the case of a futures contract, can close its own position by making a reverse transaction.

Each option has two different prices. The difference between them should not be a mystery to the investor. We are talking about strike and premium.

Strike is the exercise price of an option contract. This is the price at which the option holder can purchase or sell the futures contract. This selling price is standard. It is set by the exchange for each type of option contracts.

The premium is directly the cost of the option. During the conclusion of an option contract, the premium must be paid by the buyer to the seller. In fact, it is the monetary reward of the latter. Such option prices are the result of trading on the stock exchange.

In other words, options mean making a choice of the two above prices. The stock player first of all chooses options that suit him in terms of the strike value. Only after that, their premiums will be determined during exchange trading.

Forwards, swaps and warrants

Futures and options are essentially derivatives. So in exchange trading it is customary to call derivative financial instruments. However, the list of derivatives is not limited to them. Let's take a quick look at forwards, swaps, and warrants.

The etymology of the term forward has an obvious reference to the English language. Forward in English means forward. Futures and forwards are very close concepts. The only difference between them is in the place of their circulation and some parameters. If the former are traded on the stock exchange and have standardized terms and delivery terms, then the latter circulate on the interbank market and the specified parameters in their case are arbitrary.

A warrant is a security that gives its holder the right to purchase a certain number of shares on a specified date at a specified price. As a rule, warrants are used for a new issue of shares. They are traded like securities. The size of their value is determined by the price of those shares that underlie it.

A swap is a derivative that allows you to exchange one financial obligation for another. An example of a swap would be the exchange of a present financial liability for the future.

The new edition includes a new chapter on securitization and the 2007 credit crisis, a discussion of central clearing, liquidity risk and indexed overnight swaps, more detailed description energy and other commodity derivatives, an alternative derivation of the Black-Scholes-Merton formula using binomial trees, an appendix on the cost of capital model, examples demonstrating the calculation of risk value from real data, new material about capital protection notes, gap and closed options, jump processes and model applications...

The book focuses on derivatives markets and risk management. With its exceptionally broad scope and thoughtful writing style, it has become a trader's reference book and the most popular college textbook. The balanced combination of rigor and accessibility does not require the reader to have any a priori knowledge of options, futures contracts, swaps and other derivatives.
The new edition includes a new chapter on securitization and the 2007 credit crisis, a discussion of central clearing, liquidity risk and indexed overnight swaps, a more detailed discussion of energy and other commodity derivatives, an alternative derivation of the Black-Scholes-Merton formula using binomial trees, an appendix on cost of capital models, examples demonstrating the calculation of risk value from real data, new material on capital protection notes, discontinuous and closed options, jump processes, and applications of the Vasicek and CIR interest rate models.
For the successful development of students, primary knowledge of finance, probability theory and mathematical statistics. The book will be useful to teachers, students, researchers, stock analysts, financiers and all those who work in the financial market.
Explore derivatives from the book that has become desktop reference for practitioners and the most popular textbook for students.
A number of innovations were made in the eighth edition.
A new chapter on securitization and the 2007 credit crisis.
Discussion of central clearing, liquidity risk and indexed overnight swaps
A more detailed description of energy and other commodity derivatives
Alternative derivation of the Black-Scholes-Merton formula using binomial trees
Appendix dedicated to the cost of capital model
Examples demonstrating risk value calculation from real data
New material on capital protection notes, gap and closed options, jump processes, and applications of the Vasicek and CIR interest rate models
The book is accompanied by version 2.01 of the widely recognized DerivaGem program, which can be downloaded from the author's website. It contains many improvements. The program is greatly simplified, since *.dll files are excluded from it. It now covers credit derivatives. Access to the source code of functions is open. In addition, functions can now be used in conjunction with the program open office for users operating systems Mac and Linux.
about the author
John C. Hull is Professor of Derivatives and Risk Management at the Maple Financial Group (Joseph L. Rothman School of Management) at the University of Toronto.
8th edition.

Starting to work with real financial instruments (currencies, stocks, bonds), every novice investor or trader who is counting on a quick profit from speculation or a “long” income from dividends, sooner or later stumbles upon the magic words “future”, “option” and others. obscure terms beckoning billions in profits. What it is? What are derivatives used for? What should be the initial capital? Is it worth it for a novice investor to enter this sector and what “pitfalls” will inevitably drown a novice? Let's try to consider the secondary market financial instruments(derivatives) from the point of view of an amateur.

What are derivatives

Let's start with the basics. In the world of finance, there are two types of financial products that can be dealt with: underlying products and derivatives (derivatives from underlying instruments). Basic products (assets) can, roughly speaking, be touched - these are real shares of companies, state and municipal bonds, real goods and services of organizations, as well as a currency backed by the state. Derivatives are confirmed promises to buy or sell an underlying product, to pay the difference between a purchase and a sale, and so on. Hence the term - “derivative products”, in English “derivative” - without real finance, they basically do not make sense.

The essence of derivative financial instruments

Let's study the main types of derivatives in more detail. If the underlying products are produced (like oil, gasoline, grain, tractors, brooms, slippers) or issued (shares in an oil producing company, bonds of a state slipper corporation, state currency) by a specific organization, then derivatives are simple contracts between any two companies. The cost of these contracts, of course, depends on the value of the underlying product, however main feature derivatives – settlements on these free bilateral agreements are carried forward. Moreover, these contracts themselves with settlements in the future are securities in the modern legislative field - that is, they can be bought and sold without restrictions. At the same time, standardized contracts can even be traded on specialized exchanges. And now, when you are completely confused, let's move on to a simple and understandable description of the main types of derivatives - using the example of sausage.

forward contract

Imagine a small shop for the production of smoked sausage. The production has a certain working time - they buy meat today, and the finished sausage can be shipped to the buyer (shop) only after 3 months. They buy meat at a fixed price, in order to make a profit, they need to sell sausage for 100 rubles (conditionally). However, the market is unstable, in a month everything can change, and then the sausage can be sold for 120 rubles (which is very good) or 80 rubles (which is very bad).

The sausage maker finds a store, the owner of which, of course, also does not know what the exchange price of the sausage will be in 3 months. If in the future the purchase price of the sausage will be 80 rubles, the store owner is happy, resells the product with a big profit and gives his wife a new Bentley. If the purchase price of the sausage is 120 rubles, the merchant will go bankrupt, take the last Zhiguli from his wife to cover the debt and will never be online again.

And for the sausage maker, and for the store the most profitable option will be a forward contract. Back in March, they agreed that in June the sausage shop would supply the store with sausages for exactly 100 rubles, regardless of the current price. Naturally, if the price is different, the profit of the sausage maker or the profit of the store owner in a direct deal could be greater - however, when concluding a contract for three months, they guarantee each other both profit and sales.

Features of forwards (futures). How to earn

Naturally, a person who invests his funds in secondary market instruments is absolutely indifferent to the nuances of the relationship between the sausage maker and the store. However, the fact is that forward contracts can be not only real, deliverable (when the sausage shop and the store actually minimize their risks, and in the end, real smoked sausage is actually delivered to the store in exchange for real money). There are non-deliverable, or settlement, forwards that serve exclusively as instruments of speculation on the stock exchange - no sausage goes anywhere and serves only as a pledge of the transaction.

The word "future" (from the English future, "future") serves only to refer to a standardized (officially issued according to accepted standards) forward contract that can be sold and resold on the stock exchange. There are no deliveries of real goods or currency. Futures are resold, and at the expiration of the term, the final parties to the transaction pay each other in strict accordance with the current value of the goods, based on the primary terms of the contract. Today futures contracts are registered for energy carriers, products Agriculture, precious metals, currency and other real financial instruments.

Option

Let's get back to our sausages. If the sausage maker is not interested in strict price fixing at the minimum profitable level, counting on price increases in the future, he can conclude an option contract with the store owner. This means that after three months the owner of the workshop, having produced a sufficient amount of sausage, has the right, at his discretion, to sell the goods to the owner of the store at the agreed price (100 rubles) - or not to sell if the market price has risen and another buyer has been found for this sausage, ready to pay 120 rubles. Unlike a forward contract, an option implies the right, but not the obligation, to enter into a transaction on pre-fixed terms. As compensation for possible losses, the sausage maker, when concluding a contract, pays the store the so-called option premium (its size is determined by many conditions, in this case the normal premium is 20 rubles).

Features of options. Is it possible to make money on options?

As an exchange instrument, options are a type of futures and are traded in the same way as any other exchange contracts. You can try to make money on the difference in rates (“bought cheaper - sold more expensive”) or, with some experience, exercise the option right by demanding the execution of the contract. There are two option options. The “American” contract can be exercised on any day before its expiration date, the “European” option can be redeemed strictly on a certain day and not earlier. Forex options are very often used in the international currency market by exporters or importers of goods. To hedge the risks of sharp changes in the exchange rate, they buy options for the right to buy / sell currency at a certain rate, the volume of the transaction strictly corresponds to the value of the exported or imported goods. Even if the settlement currency rises or falls sharply in price, by exercising the option, all possible damage is reduced to the size of the option premium - and this, you see, is quite a bit, especially if foreign economic transactions are concluded for millions of dollars.

Swap contract

Even more interesting story from the world of sausage production. It is sad for a sausage maker to sell sausage either for 120 rubles, or for 80, sometimes for 140, and sometimes for 60 rubles. He lacks stability - every month to ship a batch of goods for 100 rubles. On the other hand, there is a store owner who is also not interested in constantly buying sausages at different prices. He sells this sausage at a fixed price, and stability would not hurt him either. Such stability-seeking businessmen are united by swap contracts, usually issued by intermediary investment banks. Thus, the sausage maker's floating income (from 60 to 140 rubles) turns into a fixed 100 rubles, thanks to the balance with the store's floating costs, which are also fixed, regardless of the current sausage exchange rate on the market. The swap intermediary, of course, takes a percentage, but that's another story.

Features of swap contracts

In practice, swap contracts are often used to obtain Money secured by existing securities or, conversely, the acquisition of securities for certain exchange transactions (REPO transactions). The essence of such a swap is that simultaneously with the acquisition of shares, bonds, currency (with immediate delivery to the buyer), a counter transaction is concluded, according to which the seller of currency or securities is obliged to buy the underlying asset back after a certain time at a fixed cost. Due to this, the risks of damage due to changes in exchange rates are minimized. From the point of view of speculative trading, instead of opening a position on a rising/falling underlying asset, it is more profitable for a trader to conclude a swap contract that fixes the price of a currency or a share.

CFD (contract for difference)

One of the most popular derivatives on modern market derivatives. A contract for difference is a futures contract - most often for the purchase of currency, stocks or other securities. The parties entering into CFDs agree on a conditional sale and purchase of the underlying asset after a certain period of time. However, there is no real transfer of rights to the underlying asset (currency, shares) - after the due date, one of the counterparties pays the other the difference in the value of the asset. If the asset has increased in price, the buyer receives money from the seller exactly in the amount by which the asset has risen in price. If the stock or currency fell in price - on the contrary, the buyer pays the difference to the seller. This is an absolutely speculative trade in real underlying assets, which allows you to enter the market with minimum investment. To trade huge volumes of currency or stocks, there is no need to have all their value on hand - it is enough to operate with relatively small amounts, by which the asset can rise or fall in price.

Hedging risk with derivatives

Derivative financial instruments are used to achieve two different goals: making a profit (through speculative trading) and reducing financial risks (hedging) when making complex transactions on real markets underlying assets. Hedging in the general sense is the insurance of a transaction in one market by opening an opposite transaction in another market. For example, you buy shares of a certain company, but you are afraid of a fall in their value. To hedge this risk, you buy a futures contract or put option (sell) on the same company's stock. So you somewhat reduce the probable profit from a transaction on the real stock market, but minimize the risk of losing everything with sharp movements in the exchange rate. The same applies not only to the stock market, but also to currency transactions and trading on commodity exchanges. With the help of derivative instruments from the same assets, you reduce the risks of transactions with real underlying assets.

Newcomers to derivatives markets

Derivatives markets are attractive both for investors who insure their transactions in real markets, and for traders who have the possibility of speculative trading with a huge “leverage”. In fact, many derivatives transactions are “credit trading”: traders profit by trading gigantic amounts of currencies or stocks, but not actually owning them. It is this - the opportunity to trade with minimal investment - that attracts beginners to the markets of options, futures and swaps.

However, this should also scare them away: few people who do not have experience in trading real underlying assets will climb into this inferno. Unrealistically complex rules for dealing with derivatives, various rules for exchange and over-the-counter (direct) transfer of assets, the need to constantly monitor several interconnected instruments and monitor asset markets - and this is just the beginning. It is enough to imagine that there are derivative instruments from the derivative instruments themselves - options on futures, for example, a beautiful financial nesting doll in a nesting doll.

Fortunately, most newcomers to derivatives are well protected. To trade exchange-traded (standardized) derivatives (for example, on the derivatives market of the Moscow Exchange), a trader's or professional investor's license is required. Opportunities to take advantage of over-the-counter derivatives trading schemes are also not too many, and the entry threshold is much higher there.

Hello! When it comes to the possibility of GOOD EARNINGS, it seems to me that there are no uninteresting topics ... Today I want to tell you about futures and options.

Why should those who are going to engage in or are already engaged in BO trading know about this? Yes, because without it, the work will not be successful!

Optional and futures market is more diverse than the currency. Therefore, there you can get large quantity earning opportunities. Here, as elsewhere, appropriate knowledge and professionalism are required to make a profit.

It is necessary to gradually gain experience, learn special strategies, which can then be very useful.

It's important to understand what are futures and options to be successful in this market.

They are derivatives, derivatives of financial instruments. This is a written contract that contains information about some actions regarding key assets.

Its key difference from traditional types of contracts is the fact that it is able to be bought and acquired in itself. There are no actual asset transfers during trading.

What I'm talking about today:

Features of the modern options and futures market

Let's look at what this market is.

It originally arose from the trade in a variety of raw materials belonging to the category of agriculture. It was purchased by processing companies.

Both parties managed to establish relations for a rather long period, during which some price fluctuations could occur in different directions.

The need for cooperation was very important for each side, because of which it was necessary to agree on a stable price, which was clearly stated in created contracts. They acted as a kind of prototype for the modern market.

The main market at one time was the price at the time of purchase or sale. The development of this market has gradually overshadowed the presence of a physical product.

At present, a variety of goods can act as assets in this market, and not only products of the agricultural market. For example, it can be oil, precious metals, currency pairs, various securities, and so on.

Trades have a rather abstract character, which is why they are carried out in the appropriate mode.

During them, approximate prices are set for specific goods. Thanks to this, you can understand how much one gram of gold costs, or, for example, an oil barrel.

Futures is also able to act as an underlying asset among a variety of securities. The owner of this option is able to sell, purchase the corresponding contract, from which certain obligations and rights follow.

In this market, hedgers as well as speculators act as the main players. The latter are mainly interested in reselling securities, having received a certain profit from these actions.

For hedgers, the main nuance is the delivery of assets directly.

Trading futures and options

Do you know why this type of trading is quite in demand today? It is necessary to master the key rules of the game on the stock exchange in order to succeed in this process.

Traders must learn to anticipate major changes in asset prices, which can be the basis for receiving the final income.

To do this, a variety of means can be used, including:

• Statistical data.
• Analytical information.
• An experience.
• intuition, etc.

Do you want to be successful? Then remember what you NEED:

• You need to have a clear idea when entering the market, where you can capitalize on more lively trading. For example, the cost of oil at a particular point in time can be very stable, but the cost of grain is constantly fluctuating in different directions.
• You need to learn how to correctly select assets that have a good prospect for making a profit. You also need to master the process of choosing quality trading strategies, which may change taking into account the nuances of the current market.

There are two main types of trading, which have their own unique features and nuances:

• UP. In this case, it is necessary to count on the increase in prices. When an active period of price growth comes, you can get a good level of profit. The risk in this case is that the contracts have a certain duration. Therefore, it is not always possible to wait for the necessary price increase within a specific time frame.
• DOWN. This option can also be very profitable. It implies the need for a price drop, which the user must anticipate in advance. There are also certain risks, which lie in the possibility that prices will not have time to fall. There are a lot of nuances that you need to be able to recognize, evaluate and clearly understand.

Option and futures: differences

From all of the above, a completely logical question follows: what are the differences between an option and a futures contract?

The main fundamental difference between them is the fact that, according to futures, sale and purchase are mandatory, and an option gives the right to these actions, but not obligations.

In addition to differences, they have some common features, among which are:

• The short-term nature of both contract options. In rare cases, the validity period may be more than one year.
• The assets used for trading in both cases are actually the same.
• They are listed on the stock exchanges.

There are a few basic differences between them that are very important to understand clearly.

But what is the most important difference? Most modern traders prefer options, because here it is possible to reduce risks to a large extent.

To work on the futures market, a trader is required to make a special guarantee fee. If prices start to go in the wrong direction, in which it was intended, additional amounts will have to be invested to maintain the contract so as not to lose their positions.

Due to the rapid movement in the market, virtually all deposits may collapse, which will certainly cause certain losses.

In the case of options, the investor is relatively safe. It may only require the issuance of a certain bonus. If the movement is predicted correctly, it is theoretically possible to obtain significant profit indicators.

The second difference is the ability to stay in the market. If a user who works with futures finds himself in a situation where a position needs to be eliminated, trouble can arise.

But with options in this case, everything is much simpler. The option holder does not have to liquidate anything, because he has no corresponding obligations.

Forward, futures, option

I'll tell you about such a cool thing as a forward contract!

In the case of forwards and futures, the contract specifies the conditions for acquiring the asset in the future. Such financial instruments are currently quite popular.

A forward contract has the main purpose, which is to fix the value of an asset at a specific level. This is necessary for its purchase in the future at a price that will be agreed in advance.

Buying futures has its own unique nuances, like buying options.

forward contract is a common financial instrument when two persons enter into a specific agreement. In it, both parties have specific duties and rights.

For example, one side has to put something, and the other side has to buy. Forward is a non-exchange contract unlike futures. It can be concluded for almost any period.

Mutual agreement also underlies the regulation of supply volumes. Often forwards are used between various banking institutions.

Most often, the subjects for signing such contracts are an interest rate or some specific currency.

In some cases, the actual delivery of selected assets may not be carried out with forwards. Such a contract is not easy to close through a deal of the reverse type, because the agents on the opposite side can be very diverse.

This kind of contracts for trading with oil resources is also very popular.

Options, futures and other derivative financial instruments

Why do you think I decided to write an article on this topic?

Currently, it has become very relevant, popular in all respects. A book has even been written. It can be extremely useful for developing skills, moving to a new level in the implementation of such financial work.

Many professionals will also appreciate this information because it can be indispensable for developing their own knowledge, level of analysis, etc.

A derivative financial instrument is a specific contract that must be realized under certain conditions. At the same time, the parties that conclude it receive certain obligations and rights.

Each side can end up with both a positive and a negative result in financial plan after implementation. These instruments are based on special assets.

They often serve as securities, currency pairs, raw materials and much more. Domestic legislation refers to this category:

• Forwards.
• Options.
• Futures.
• Swaps.

All of the above tools may have unique features. A swap, for example, is an agreement between two parties to exchange payments.

If you look into the details, these are several forward-type contracts, when the occurrence of obligations is characterized by periodicity.

To work with such instruments, various strategies can be used, including hedging, speculation.

The second option is the execution of certain transactions, the final goal of which is profit on changes in the price of instruments. With the help of speculators, the overall level of market liquidity is ensured.

Investing in such instruments can be profitable under certain circumstances, including the presence of certain capital, good knowledge and other similar nuances.

Hedging is also considered a popular strategy. It involves a reduction in potential risks from losses that may arise due to changes in the cost of goods of an unfavorable nature.

Forward and futures contract: option

What is this about?

In accordance with such contracts, a certain asset is acquired. A futures contract is characterized by certain terms and conditions, while forward contracts can be created without them.

Fixed-term contracts have some main features, among which are:

• The document fixes the moment of time that passes between the conclusion and execution of the transaction.
• The subject most often is the standard volume of assets.
• When there is a settlement of relations, it is not necessary to sign additional protocols, various agreements and all that.
• The presence of a condition regarding a possible change of side. For this, the second does not require prior consent. Thus, contracts can simply be sold.

Forward contracts are categorized as non-exchange contracts. They suggest a conclusion for a real sale, the acquisition of certain goods. The contract clearly agrees on the main points between all parties.

Most often, this version of contracts is used for currency transactions.

Futures belong to the category of exchange. There are developed special conditions for various products. Quantity, quality and all other important nuances under contracts are determined in advance.

Futures and options market

Now this market very actively developed. Binary options are gradually becoming very common due to the many benefits they provide to users.

Futures are also quite in demand. The market is getting bigger and more and more deals are being made. For this, many interesting assets are offered.

THE MAIN THING is to master the main features of a particular market, work out clear strategies in order to be able to make a profit. For this, good conditions are provided in the modern market.

And since you want to earn a lot and achieve success, remember: options and futures can be a profitable tool in the right hands.