deravative trading

[takwong]

can somebody please explain what is derivative trading?? and what does a derivative company do????
Can individual do derivative trading on their own?

Thank you so much for helping me!!

 

[notfred]

I'll trade you f'(x) for g''(y).

 

[takwong]

notfred,

are you serious about that answer? If it is, that is a great answer, b/c i understand it rightaway after i saw that formula....

thanks.

tak

 

[takwong]

but one more thing, can individual do deravative trading? what does a deravative trading company does? Can you give some example companies that does that?

thanks again.

 

[Ramsnake]

Originally posted by: takwong
but one more thing, can individual do deravative trading? what does a deravative trading company does? Can you give some example companies that does that?

thanks again.

i think if u have enough capital u can do it....a friend is in to this whole derivatives thing in texas ..but he does it for ernst & young..corn, oil, electricity etc.

 

[Doggiedog]

There are many kinds of derivatives. I think the ones you are referring to are Options. Any one can trade options as long as they have the money and sign a waiver.

Other forms of derivatives are done privately between companies and the average person never gets to see them. Those you can't trade.

Anyhow, derivatives are a complex and long topic so you might be better off reading up on them before getting yourself into trouble.

 

[Ramsnake]

Originally posted by: takwong
but one more thing, can individual do deravative trading? what does a deravative trading company does? Can you give some example companies that does that?

thanks again.

i have got a rough idea.... i think you guarantee a certain price for so many units of energy or food to the producer of that energy or food at the end of a production cycle or before. at the time of procurement of the energy or the food ( as in corn, soy crops etc.) if the market value is higher that what u got it for, u can make a good profit , if not then a loss. the producers of energy or crops deal with this kinda business to make sure they dont go into losses. this whole description might be entirely wrong. but this is the only rough idea that i have regarding derivatives or maybe im confusing derivatives with something else.

 

[Bleep]

A derivative financial product is a contrived instrument, the value of which depends indirectly on the price of a cash instrument. The price of the cash instrument is referred to as the "underlying" price, quite often. Examples of cash instruments include actual shares in a company, physical stocks of commodities, cash foreign exchange, etc
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