The most comprehensive educational resources for finance

Trading CFDs Online – The Advantages

What they are Contracts for Differences (CFDs) are a powerful form of derivative that allow traders to take advantage of movements in the price of an underlying asset. The instruments that can be traded through the CFDs can range from stocks (and market indexes) to commodities and many products in between. With CFDs, traders can

Stocks – Contracts for Difference

In his book Accounting for Investments, Equities and Options R. Venkata Subramani states that “A contract for Difference (CFD) is a contract between two parties – buyer and seller – stipulating that the seller will pay to the buyer the difference between the current value of an underlying equity share and its value at expiry date

Options, Futures, and Other Derivatives (9th Edition) – Book Review

Options, Futures, and Other Derivatives by John C Hull covers derivative markets and risk management. Readers are expected to know basic finance, probability and statistics. A novice to options, futures, contracts and swaps will be hand held through the concepts by the author. The author has also tried to maintain a delicate balance with regards

How to Develop a Winning Trading Strategy

Finding a way to put your money to work is important. While there are a variety of different investments out there that can garner you a decent return, none of them are as effective as trading stocks and bonds. Millions of people all over the world use trading to build their wealth and secure their

The Hidden Costs of White Label Binary Options Brokers

For new traders with an interest in getting into options, binary options are a great place to start. Binary options simplify the variables involved in making an investment. Binary options allow an investor to make a simple prediction: will the price of an asset increase by a certain date? Unlike traditional options, losses are capped

Put Option Payoff

A put option is the right, but not the obligation, to sell an asset at a prespecified price on, or before, a prespecified date in the future. Long Put The payoff diagram of a put option looks like a mirror image of the call option (along the Y axis). Consider a put option with a

New Short Courses: Basics of Options and Option Greeks

We have added two new short courses to our member area – Basics of Options and Option Greeks. The first course – Basics of Options – provides an overview of options and how they work. You will learn about the types of options such as calls and puts, how and where options are traded, their

What do Derivative Traders Do?

Earlier a derivative trader may have been found at the stock floor, making estimations and shouting them out. Today, a derivative trader is most likely to be found in front of a computer making his estimates and tinkering with code to make faster and better calls. A day at the office would most likely start

Strip Hedge and Stack Hedge in Commodities Market

The concept of hedging in commodities markets is the same as in the financial markets and that is to mitigate the exposure to price movements due to the commodities positions. The most common instruments that are used for hedging purposes are futures contracts as they are highly liquid instruments. Futures contracts are the most popular

Equilibrium Formula for Pricing Commodity Forwards

The forward price of a commodity is calculated much along the lines of that of a financial product except for the fact that by virtue of its physical form and characteristics a commodity incurs different types of storage and holding costs as compared to a financial product and the factors that affect the commodities forward