Futures and Options are favoured by day traders and investors for characteristics such as low cost, insurance and profit potential. They provide a viable option to hedge against losses without actually having to pay for the cost of equity.
Used in a wide range of strategies - from conservative to high risk - and can be customized to additional expectations than simply the stock price going up or down.
Gain leverage in stocks without committing to a trade. This signifies that you have the facility to attain exposure to a relatively large asset amount for a small initial pay out. The result is a high-risk/high-reward investment. You can leverage your position by fulfilling low margin requirements, eliminating the need to employ large capital required to purchase a stock in the spot market. You can hedge your losses and also earn handsome returns if the price of the stock goes up.
Takes into consideration the trader’s need to hedge, arbitrage and speculate without putting in the actual value of the underlying asset.
Considered less risky as they involve a small monetary commitment and the risk is reduced since the price is predetermined.
They offer a potentially attractive and regular income avenue as the rate of interest is fixed (in most cases but not all) till maturity.
By investing in bonds and holding them till redemption, you can earn maximum returns in the form of regular interest plus the face value amount on maturity.
While fixed income securities generally do not offer the high returns potential of other investments, you are spared the volatility common in other markets as its price fluctuation is relatively lesser than equity stocks.
Fixed income securities provide the flexibility and liquidity required to construct a customized to your specific investment objective. If required, low-risk fixed income instruments like government bonds can be sold at short notice.
Fixed income securities represent a loan from investors. As these investors are creditors to the company, in the eventuality of the company being wound down, they have priority over shareholders. Some for our fixed income products.