Futures and Options for Stock Market Beginners is very attractive because of the promise of huge profit at a very low investment. This is possible because of margin and leverage. The beginners are attracted towards the derivative trading or Futures and Options because of profit statements of big investors & traders. It is fascinating to see the profits of lakhs on daily basis in derivatives trading.
In this video, i will share the some of the key points of derivatives trading i.e. why beginners should stay away from the futures and options.
1. High profit at low investment: It is true that you can generate 100% returns or double your returns in a very short span of week or fortnight. However, you are not told that you can also wipe off your entire investment i.e. your investment can become zero because of the high margin and leverage.
2. Buy option at a small premium and earn a huge profit: As per various studies, the probability of profit for option buyers is just 5% and chances to lose the option premium is 95%. Option writes are always correct in the stock market.
3. Sell option or option writer: It is too risky as the loss is unlimited.
4. Margin requirement may change because of sharp price movements or volatility.
5. Additional cost like brokerage, stamp duty etc is very high in futures and options or derivatives trading.
6. Derivatives were originally designed for hedging. They are not a trading product.
7. You should open separate accounts for investment and trading.
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Futures and Options for Stock Market Beginners - Derivatives Trading (Hindi) trading screen | |
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| How-to & Style | Upload TimePublished on 21 Aug 2018 |
