Wat zijn enkele van de kosten en risico's van traden in beursgenoteerde derivaten?

In deze cursussen hebben we enkele van de risico's van traden in beursgenoteerde derivaten belicht. Gezien het belang van dit onderwerp verdient het echter verdere aandacht. Alle financiële instrumenten brengen risico's en kosten met zich mee. U doet er goed aan deze zorgvuldig te overwegen voordat u handelsbeslissingen neemt.

Laten we kijken naar enkele van deze risico's en hoe u ze kunt beperken.

Vaste kosten, variable kosten en commissie

Trading in exchange-listed derivatives always involves costs. Examples include fixed costs built into the total price of the product or the risk protection premium , which ensures that your positions are closed upon reaching the knockout level.

There may also be variable costs for the use of certain services provided by the financial service provider. An example of this is stops and limits.Variable costs naturally differ per issuer and per instrument. Commissions may be waived under certain circumstances. Examples of this include when the cost of the trade exceeds a certain amount or when the costs are included in the monthly account fees.

It is important that you thoroughly research all associated costs before you start trading.

Other costs and risks

In addition to the obvious costs, there are other risks that can affect your profit or loss. Even if the market moves as you expected, you could still miss out on potential profits. Below is an overview of other costs and risks:

Exchange rate risk

Exchange-listed derivatives attempt to mimic the performance of an underlying asset and track it as closely as possible. As a result, they are exposed to market risks related to the price movements of the underlying asset.

As a result, exchange-listed derivatives are also vulnerable to market risks related to the price movements of the underlying asset.

Currency risk

As discussed earlier in this course, some markets are listed in foreign currencies. US stocks, for example, are priced in USD.

Exchange rate fluctuations can affect the price of the listed derivative when you trade in an asset listed in a foreign currency. Losses can increase as a result.

Some listed derivatives, such as ETFs, are currency-hedged and limit this risk.

They work by combining foreign assets with currency pair futures containing your local currency. By locking in a desired exchange rate, you are protected against devaluation.

However, this does not always have a positive effect on your profit. For example, if the local currency devalues ​​against the foreign currency, this will reduce your profit.

Exclusion from payments

You do not receive payments arising from the underlying asset tracked by an exchange-listed derivative. These payments—including equity dividends or bond interest—are generally incorporated into the structure of the derivative itself. Therefore, they do affect the price of the instrument.

Tracking difference

The issuer of a listed derivative will do its best to track the price of the underlying asset as closely as possible. However, there will always be a difference between the performance of a derivative and the underlying asset. This is called the tracking difference.

Taxes

Exchange-listed derivatives, like all other forms of income, are generally subject to some form of tax. It is important to understand how exchange-listed derivatives are taxed in your region and to include these costs in the calculation of your expected income.

Counterparty risk

Listed derivatives are issued by third parties and can be guaranteed by a guarantor.

In this case, the guarantor is an entity responsible for paying the debts of an issuer if the issuer is unable to do so.

If both the issuer and the guarantor fail to fulfill their obligations, this may result in a partial or total loss of the value of the issuer's securities.

Although solvency problems seem an unlikely scenario, this type of risk must still be taken into account.

Lever

The function of leverage, as discussed in previous lessons, is to increase exposure to an underlying asset. Favorable performance of an underlying asset can increase your profits. However, unfavorable performance of an underlying asset can increase your losses. You can lose your entire invested capital.

The offsetting effect

When profits or losses are accumulated over a period of more than one day, they are likely to diverge from the performance of the underlying asset.

This divergence can be amplified if a market is volatile and the market direction is unclear. This can result in significant losses for traders.

Loss of your initial investment

No margin is required to open transactions with listed derivatives. This limits losses to the initial investment.

When the direction of a market is unclear, this can cause losses. The costs incurred on the position may then not be covered by sufficient profit.

This can be useful for managing risks, but it can also lead to significant losses.

When buying and selling exchange-listed derivatives, it is always possible that you will lose your entire initial investment. It is important to carefully determine your risk profile in advance and never invest more capital than you can afford to lose.

You certainly do not have to wait until you have lost your entire investment to exit the market. As we have often repeated in this course, you can use stop-losses.

This is not possible for European covered warrants because these warrants can only be exercised on the expiry date.