To shorten the road to prosperity, derivatives are the investment path to help you start getting rich; the derivatives have the following outstanding advantages:
Benefits of financial leverage: When trading derivatives, investors only need to deposit the transaction with a margin rate according to the management agency's regulations. Thus, investors only need to spend a certain amount of money to be able to trade contracts that are many times more valuable. This is the difference between derivative securities and underlying securities. Investors must ensure that they have 100% of the money or securities in their account before trading.
Flexibility: The trading method of a Derivative is similar to that of the Underlying Security. However, it has greater flexibility; precisely, investors can place sell orders even if they do not own the underlying asset, or they can buy/sell right in the same trading session.
Avoid price fluctuation risks: Derivatives are used to hedge the risk of the position of an underlying asset. From there, investors can reduce some losses or losses when the asset with its underlying position experiences adverse price fluctuations.
Two-way benefit: Investors can earn profits even when the market goes down because they can sell in advance and buy back later in futures contracts.