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Futures, Options, Warrants & CFDs


A derivative is a financial instrument that is based on another security. One such example is options. If the buying and selling of stock shares were non-existent, no options would trade either since these are based on shares.

Examples of Derivatives:
  • Options
  • Warrants
  • Futures
  • Contracts For Difference (CFD’s)

There are many advantages to purchasing derivatives, some of which include:

  1. Increased leverage
  2. Ability to lessen risk
  3. Opportunity to trade a very short term window

It is important to understand the difference between derivative types. For instance, while options and warrants may seem identical at first glance, one is offered publicly and the other privately. One type an investor can write while the other can only be sold by the company; one is dilutive which requires the creation of additional shares while the other is based on existing shares. Then there are futures and contract for difference (CFDs), which is slightly different again. The point is: you need to learn about derivates and their individual differences before investing in them.

The following section of derivatives will provide a wealth of information not only on what each type is, but will reveal the inner workings of the derivative type. With this section you will be able to dissect each derivative according to its risk and reward, the objectives of each, and if it fits your investment style. Derivatives are quickly becoming the new way to turn small speculative capital into a healthy sum, and this section will explain how.


Derivatives Articles

Learn all About Trading Options 10 articles
This options trading series will teach you very important aspects of options. The part series 'Introduction to Options' will teach you tips and strategies for trading options
Learn how to trade CFDs (Contract for Difference) 9 articles
Is it possible to turn $13,000 into $30,000 in 3 months or pull in $65,000 in one week trading CFDs? Find out how CFD trading (Contract for Difference) is taking the financial world by storm
Learn How To Trade CFDs: Developing a system that should make us money
Trading CFDs profitably require a careful risk management plan. Learn how to systematically look at CFD’s in bite-sized portions to develop system that should make us money.