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Futures and Options

 

Do you have no time to choose individual equities when you need to enter into the market and to not miss a significant movement? Are you firmly convinced that petroleum reserves fell last week? Or, maybe, you believe that drought won’t allow harvesting the planned grain volumes? Open an account with Renesource Capital and trade the wide spectrum of futures contracts and options on stock indexes, petroleum, agricultural commodities, metals, interest rates, currencies and many other assets!

Futures

A Futures contract (or simply Futures) is one of the most popular derivative financial instruments. It is a standardized contract to buy/sell the underlying asset. When entering into the futures contract, the sides (seller and buyer) agree upon a price of the underlying asset and its delivery date, set in the future. Underlying assets of futures contracts may be interest rates, currencies, stock indexes, oil and petroleum products, metals, agricultural commodities and various other assets.

There are standard codes for futures contracts that identify the underlying asset and its delivery time. Futures contracts may be used both for speculation and hedging. As a rule, no physical delivery of assets happens at speculative trades, because speculators normally close out futures contracts before delivery dates. In its turn, hedging with futures contracts allows to secure against asset price volatility. Hedgers use futures to reduce risks that exist in retail business. For example, profits of diesel oil retail trading depend on diesel oil market price, which can grow or drop. It’s required to deposit funds on a financial instruments account, in order to trade futures contracts. Collateral size is determined by the Exchange where the corresponding futures contract is been traded.

Futures trading at Renesource Capital:

  • Trading more than 500 stock futures and option contracts through 20 Exchanges around the world;
  • No minimums for futures account opening;
  • Our brokers are always available to make a trade, to place pending orders, to get information about markets events or about instruments available for trading and their specifics;
  • Professional and experienced brokers, who are always ready to provide advice and share their opinion regarding the market, based on fundamental and technical analysis, in Latvian, Russian and English.
Renesource Capital offers the opportunity to trade futures and options through all major Exchanges worldwide (CME, ICE, NYSE Liffe) using electronic trading platforms or voice trading over the phone.

Options

An option is a contract which gives the potential buyer or the potential seller of an underlying asset (commodity or security) the right, but not the obligation, to buy or sell such an underlying asset at a specified price on a specified date or within a specified time period, whereby the option seller has the obligation to fulfill the transaction (that is to sell or buy) according to the terms of the sold option.

There are options to buy and to sell an underlying asset:

  • Call option (Call) — an option to buy. This option gives the option buyer the right to buy the underlying asset at a specified price.
  • Put option (Put) — an option to sell. This option gives the buyer the right to sell the underlying asset at a specified price.

Consequently, four kinds of option trades are possible:

  • buying a call option;
  • selling a call option;
  • buying a put option;
  • selling a put option.

Risk Disclosure Statement. Margin transactions (Forex, contracts for difference CFD, futures and futures options, stock options, REPO transactions, transactions in over-the-counter derivatives and transactions using broker credit, including selling short) involve higher risk. The level of risk increases with the leverage ratio. As the result of margin transactions, relatively high profits are possible with low level of initial investments, as well as significant losses which may exceed the principal amount of investments or the amount of the collateral. Please ascertain whether margin transactions in their essence and content suit the risk profile that was assigned to you by AS IBS Renesource Capital and whether the content of margin transactions corresponds to your investment goals.

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