Definition: What is a forward contract in commodity derivatives? A forward contract is a type of derivative contract that allows two parties to enter into an agreement to buy or sell a specific commodity at a predetermined price and date in the future. It is a non-standardized contract that is tailor-made to suit the needs […]

Index CFDs: A Suitable Instrument for Diversification Index CFDs, or Contract for Difference, are financial derivatives that allow traders to speculate on the price movements of a specific stock market index. They are considered a suitable instrument for diversification due to several reasons. Liquidity and Accessibility One of the key advantages of trading Index CFDs […]

Key Factors to Consider Before Trading ETF CFDs When it comes to trading ETF CFDs (Exchange-Traded Fund Contracts for Difference), there are several important factors that traders should consider before diving into the market. These factors can greatly influence the success and profitability of their trading activities. Let’s take a closer look at some of […]

Determining the Tracking Error of an Inverse ETF Introduction Inverse Exchange-Traded Funds (ETFs) are financial instruments that aim to provide investors with returns that are inversely correlated to the performance of an underlying index or benchmark. These ETFs are designed to deliver the opposite returns of the index they track, typically on a daily basis. […]

Key Considerations when Trading Inverse ETFs Inverse exchange-traded funds (ETFs) are financial instruments that aim to provide investors with returns that are inversely correlated to the performance of a specific index or benchmark. These ETFs are designed to profit from declining markets or sectors by using various strategies such as short selling or derivatives. When […]

Definition: How can traders hedge their interest rate exposure using Interest Rate Futures? Interest rate exposure refers to the risk faced by traders due to fluctuations in interest rates, which can have a significant impact on the profitability of their investments. To mitigate this risk, traders often turn to interest rate futures as a hedging […]

Definition: How do options on futures differ from regular futures contracts? Options on futures are derivative contracts that give the holder the right, but not the obligation, to buy or sell a futures contract at a predetermined price (strike price) on or before a specific date (expiration date). They provide traders with flexibility and additional […]

Shout Barrier Option A shout barrier option is a type of exotic financial derivative that combines features of both barrier options and shout options. It is a complex instrument used in financial markets to hedge against specific risks or speculate on price movements. Definition A shout barrier option is an option contract that gives the […]

Options on Futures: Different Strike Prices Options on futures are derivative contracts that give the holder the right, but not the obligation, to buy or sell a futures contract at a predetermined price, known as the strike price, on or before the expiration date. These options provide traders with the opportunity to profit from price […]

Minimum Trade Size for Index CFDs Index CFDs, or Contract for Difference, are derivative products that allow traders to speculate on the price movements of various stock market indices, such as the S&P 500 or the FTSE 100. One important aspect to consider when trading Index CFDs is the minimum trade size. The minimum trade […]

What are the risks associated with Currency ETFs? Currency exchange-traded funds (ETFs) are investment vehicles that allow investors to gain exposure to foreign currencies. While these funds can offer potential benefits, it is important to be aware of the risks involved. Here are some key risks associated with currency ETFs: 1. Foreign exchange risk: Currency […]

Definition: What is a Commodity Broker? A commodity broker is a professional intermediary who facilitates the buying and selling of commodities on behalf of clients. Commodity brokers play a vital role in the commodities market, connecting buyers and sellers and executing trades on various exchanges. Roles and Responsibilities of a Commodity Broker Commodity brokers have […]