1. One can get benefitted from trading in derivatives by 4 ways and the same are listed for your perusal:
2. One is able to speculate in case one is able to analyse the direction of the movement of the market.
3. One is able to hedge and it can be called as the best risk management instrument. One can use derivatives effectively to cap the losses in underlying asset.
4. One is able to take the arbitrage benefit by virtue of difference prevailing in price of derivative product and underlying asset.
5. One is able to buy on margin as one is only paying a fraction of the total cost of the transacted value but one has to be ready to chip in for the margin call in case stock behaves oppositely.
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2. One is able to speculate in case one is able to analyse the direction of the movement of the market.
3. One is able to hedge and it can be called as the best risk management instrument. One can use derivatives effectively to cap the losses in underlying asset.
4. One is able to take the arbitrage benefit by virtue of difference prevailing in price of derivative product and underlying asset.
5. One is able to buy on margin as one is only paying a fraction of the total cost of the transacted value but one has to be ready to chip in for the margin call in case stock behaves oppositely.
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