Derivatives - Tips and Traps in Futures & Options in MARKETS - 1. Margin money can become a very tricky issue. You might bet on the fact that the markets might bounce ...
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07-02-2011 04:20 PM
Tips and Traps in Futures & Options
1. Margin money can become a very tricky issue. You might bet on the fact that the markets might bounce back to the levels that you expected, but you might have to keep more margins for that
2. Always when you invest take a view on the maximum profit levels at which you will come out. Without having a view will lead to more greed. which will ultimately lead to losses.
Watch this space for more
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07-02-2011 09:11 PM
Good Points to note. Its even there in Options writing, where lets say you write (Sell) 5500 Put, the trigger might be at 5550. Markets can go to 5540 for a few mins and bounce back to 5700. Even though 5700 is a profitable situation, your contract would have auto squared off on trigger at 5500 in losses unless you have additional funds.
Just make sure to have sufficient funds so that your positions don't auto square off.
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