Saturday, August 18, 2007

Derivatives And Risk

In extremely volatile times like we have presently, it's very prudent NOT to have leveraged positions through stock futures and options. Controlling risk should be the prime motive behind any move in these volatile markets, also remaining in cash in times like this gives better buying oppurtunities as and when markets take a sharp drop. Playing stock or commodity markets on borrowed money should also be avoided. After all it's not only about making profits, it's also extremely important to protect the capital.