Options carry a high level of risk and are not suitable for all investors. Both of these strategies can be effective when dealing with a single stock position, but what if you're trying to reduce the risk of an entire portfolio? Return to Course Overview. If you are not comfortable with selling calls on your stocks and you are still concerned with the cost, then this strategy may not be appropriate for you. Thus loss in Stock Market gets offset by the gains in Index Futures.
Trading Opportunities in Equity Index Futures. Also available in | | | Another possible trading strategy is an index spread. A spread is the simultaneous purchase and sale of two futures contracts. An index spread is a common and effective trading strategy. The strategy is designed to express the relative value between index contracts.
Logic behind the hedging strategy :
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Futures traders try to predict what the value of an underlying index or commodity will be at some point in the future. Speculators in the futures market can use different strategies to take. Achieving Social Mandates with CME Equity Index Futures Learn how trading a combination of E-mini S&P index futures can synthesize investment strategies that restrict exposure to the energy sector. Equity and Equity Index Derivatives Trading Strategies – Questions and Case Studies Equity Index Futures Strategies 18 Introduction to Equity and Equity Index Options 20 topics of the brochure “Equity and Equity Index Derivatives – Trading Strategies.