In uncertain market conditions, such as currently prevail in international markets due to news of rising inflation and excessive money printing, traders are increasingly using financial derivatives to be able to profit from both the rise and fall of asset prices.
Financial derivatives are instruments that give you the opportunity to trade a certain type of product (usually shares, currencies, indices, gold, oil), in such a way that you do not become the owner of that product, but earn only when the price of the product rises or falls depending on your position.
We talked about this topic with Velimir Anđušić, head of the financial operations sector, from the brokerage house Limit Prime Securities.
How does trading in financial derivatives work?
Trading on the financial derivatives market, as one of the most liquid markets, works very simply. All you have to do is open an account with a regulated investment company (broker) and start trading using your smartphone, tablet or laptop. For clients who trade through Limit Prime Securities AD, the company provided free training so that a person interested in starting trading would have sufficient knowledge in using the platform.
Who can trade?
All persons capable of participating in legal transactions, i.e. persons of legal age, can trade.
Does it involve risk/benefits?
When it comes to risks, trading in derived financial instruments (financial derivatives) can include a significant risk of losing some or the entire amount of invested funds, so you should always keep in mind that you do not invest the amount of funds that you cannot afford to lose. On the other hand, when we talk about benefits, it is certainly potential earnings that you can achieve, using all the advantages of trading these instruments.
What would be your advice for beginners?
If you want to start trading, I advise you to start with a demo account. A demo account allows you to step into the world of traders by receiving a certain amount of funds (virtuleni) with which you can trade. Thanks to the demo account, you can familiarize yourself with the trading program, the terms and methods of trading, study the offered instruments that are traded, check the theory of technical analysis in order to determine the trend of product price movements, etc. So, a demo account can serve you as a good training for CFD trading. Also, when you start opening your first positions on a real (real) platform, I suggest you choose a sector that you understand, or that you have been following on the market for some time, as well as use various technical and other analyzes of market trends.
What are the current developments in the global market related to the trading of financial instruments?
In light of more money being printed by most central banks in the world, the price of gold is once again hovering around the $1900 per ounce level. Also, for the first time since October 2018, the price of crude oil is at the level of 70 dollars per barrel, which represents a significant increase compared to the previous period.
As the chapter of the Covid-19 pandemic slowly draws to a close in the developed world, the risks associated with the economic consequences of the pandemic are starting to materialize. One of those risks is the rising rate of inflation. In April, consumer prices in the USA rose by 4,2% on an annual basis, and in May by another 0,8%. Prices have so far risen almost as much as the Fed predicted they would rise for the entire year. There are similar conditions in the EU zone, so inflation records growth that is mostly caused by the increase in energy prices, although the European monetary authorities expect that inflation will not exceed the level of 2021% in 1,9.
If you want to preserve value by investing in a derivative of your choice, you can do so in a very simple and efficient way by opening a trading account with a licensed investment company Limit Prime Securities.
This renowned company is regulated by the Capital Market Commission of Montenegro and through its platform offers you direct access to world stock markets and trading in the most attractive financial instruments.
If you want to start trading, you can register here, and for more information you can call +382 67 242 086 and one of the employees of Limit Prime Securities will meet you.
Email: marketing@limitprime.com
Website: https://limitprime.com/me
Phone number: +382 67 242 086
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