DERIVATIVES
These are trading instruments like futures and options ( PUTs / CALLs ). These have been conceived as hedging instruments but in India they have been used for speculation as high leverage (1 : 5 ) is available easily and legally.
The legendary US investor Warren Buffet has called these derivative instruments as WMD ( weapons of mass destruction ).
It is very important that any person indulging in derivative trading should have clear understanding of full implications. But mostly that is not the case as these concepts are not very easy to understand and assimilate.
In our options trading module we try to give recommendations – simple trades as well as complex strategies involving multiple trades. Implications can be explained to an individual if he contacts over email / messenger or on mobile.
Always keep in mind that these are relatively high risk / high gain trades compared simple buying and selling equities.