Last year I published an e-book with this title, which I think is very timely especially now that the great crisis has wiped out all the "magicians" of forecasts and analysis techniques .
probably update it on a new publication, but in the meantime, as I promised, will resume beginning the discussion on derivatives, hoping to be clearer and more direct for the (many, very many!) Newcomers, eager rightly to understand and learn.
This time it really part from "absolute zero" but the concepts that I prepare to exhibit will be useful to those who already know these tools. Will use terminology that is absolutely perfect, but easy to understand.
Follow me carefully.
INDEX S & P MIB - My operations on derivatives is now speaking to the Italian market and, specifically, the top 40 national titles in the bag. The S & P Mib is a number that arises from a complex mathematical calculation, which we do not care about the details, and represents the "value" of all these 40 stocks. At this time this value is placed at (approximately) 15,000 points.
THE BET India - Useless, in my opinion, the use of hypocritical and misleading euphemisms. Although their original purpose was anything but an entirely different purpose and value, the derivatives are generally used to make the real "bets" on the rise or fall on the so-called "below" that, in our case, is precisely , the S & P Mib.
THE FUTURE (FIB and FIB-MINI) - The easiest way to "bet" (in the worst sense of the word!) Consists of the Future. To bet on the "up" just "buy" a Future; to bet on the "bottom" is enough to sell it. The bet, in fact, can be done either upward or downward: in turn, the Future is can earn (or lose), equally in all market conditions. By itself, the "bet" is to predict the value of "future" (in fact, Future) S & P Mib index on the date of expiry of the Future itself, which always falls on the 3rd Friday of March, June, September and December . In fact, the futures market is so "liquid" that the purchase and sale can be made at any time, and each transaction can be closed (with the operation of opposite sign) at any time ever. In practice, the futures have a quarterly basis, but in fact can be used (as in fact almost always the case) even for a few hours or a few minutes. The operation begins with a purchase or a sale and can be closed, respectively, with a sale or a purchase, or can be brought to an end (but is increasingly rare), and in that case, the closing takes place automatically index ratio on the opening day deadline.
When operation opens and closes the same day we calculate the difference between the purchase price and the sale and the difference is credited (or charged) after the close of the session on the appropriate "Income Derivatives" opened at a authorized intermediary (and tools) to provide this service.
when the future remains open after the session, it will still be compensated by the "reference price", ie the index value calculated on the average of the last minutes of trading (currently the trading hours are from 9 am to 17.40, or a little later than the close of the stock market). In any case, the counting and the implementation of charges / credits are played on the same day. The amounts are always to be understood and liquids available.
In theory (we will see that in practice is not necessarily so) the creation of a Future involves "blocking" automatic liquidity on account of a large derivatives, without which you can not do this.
When the transaction closes, the cash is automatically unlocked. If the transaction produces a gain no problem (anzi!), but if it generates a loss, there is a risk of going off the side "while the future is still open in that case the Bank is entitled to request 'immediate integration of the amounts required or, failing that, forced to close positions. This information makes it necessary right now, as it is always good practice to distinguish between capital invested and available capital.
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