The Spanish stock market traded 41.407 million euros in January, 6,8% more than in the previous month and the best month since October, although 18,6% less than in January 2018. The number of trades stood at 3,6 , 15 million, 203% more than in December. On the other hand, the cash traded in the ETF segment reached 11,6 million euros, 43,1% more than in December and XNUMX% less than the same month of the previous year. The number of warrant issues and certificates admitted to trading it amounted to 1.038, 209% more than the same month of the previous year.
The financial derivatives market started 2019 with a nominal volume traded of 49.030 million euros. The futures trading on the Ibex 35 increased 4,8% in January, but fell 4,3% compared to the same month of the previous year, and that of the Mini Ibex 35 futures increased 9,3%, although it fell 4,1 % compared to January 2018. The volume traded in equity futures improved by 328,3% compared to the same month of the previous year.
Some data that indicates very clearly that there is life beyond the stock market since there are currently many financial products where we can invest our savings. However, you must be especially careful with them, since although they are not toxic, they do carry an excessive risk in their operations. To the point that they can make us lose a good part of the investment made. For this reason, it is very important that you know what these financial products consist of and when it is more advisable to take positions in these investment designs.
Equities: financial derivatives
Undoubtedly one of the investment models most prone to risk and therefore you must exercise special caution when opening positions in them. Financial derivatives are instruments whose value is based on the price of another asset. It is a product that is very suitable for entering more limited financial markets for small and medium investors. For example, they can be precious metals, raw materials or others with similar characteristics. They are more complex due to their very nature.
So that you can understand it a little better, we will tell you that if you want to invest your available capital in gold, one of the alternatives that you currently have are the financial derivatives linked to this very special financial asset. Not surprisingly, the options to invest in the yellow metal that you have at the moment are much more restricted than in other more conventional financial assets. On the other hand, financial derivatives allow you to access to markets that until a few years ago it was nothing short of impossible to open positions.
Derivatives on commodities
This very special product is based on the fact that they are contracts that are registered and admitted to negotiation. They are fundamentally characterized because in both cases they are agreements, between two parties, for the purchase or sale of a specific amount of electricity at a future date at a fixed price. Wherein, the difference between swap and futures is the frequency of settlement of the profit and loss. In the swap contracts Profit and Loss are not settled daily, although they do have a periodic settlement.
It is certainly a complex investment model but one of the safest financial assets out there at the moment is based. Not surprisingly, this sector is established as one of the safe haven values par excellence and that serves as protection against the scenarios of greater instability in the equity markets. Acting as a very innovative alternative to buying and selling shares on the stock market of companies in this strategic sector in international economies. From this point of view, it does not imply excessive risks in taking positions.
Futures contracts
If there is a product that can be very interesting for small and medium investors, without a doubt this is one of them. But it is also very complex due to the special characteristics that its structure provides. Futures contracts are a contract or agreement that obligates the contracting parties to buy or sell a specified number of goods or values. But with an indispensable condition that resides in the fact that it must be done at a future date and with a price established in advance.
One of the most relevant examples are futures on stock indices and they represent another way of understanding investment in stocks. equity markets. Beyond other technical considerations and that can lead you to have certain problems opening positions in this class of very special financial products. Not surprisingly, what is listed are the futures of the stock indices to which these types of financial contracts are linked.
Warrants: trading lower and higher
This is a financial product that really carries many risks in its operations. Not in vain, you must keep in mind that with them you can earn a lot of money, but for the same reason, leave you many euros on the way. Not all investor profiles should be prone to their operations and, of course, under high learning in their movements since you can pay dearly for contracting this product if you do not meet the requirements to operate with warrants. Although they have become popular in recent years and are present in the offer that almost all banking entities have been developing.
In any case, warrants are also derivative financial products. But this time you can formalize them through purchases (call) or sales (put). Always linked to an underlying asset, which is the aspect that differentiates them from other equally sophisticated investment models. Like a fixed price in which you must perform these kinds of operations. On the other hand, it has the great advantage that you can bet on a security, both on upward and downward trends. In other words, it is adapted to all the scenarios that equity markets may present.
Exchange traded funds: safer
With complete certainty that this investment model is much better known to you and that you have even hired it at some point in your life. They are also known as ETFs and it is a combination of what are traditional investment funds and the purchase and sale of shares on the stock market. On the other hand, it is a strategy that is aimed at taking positions in lesser known financial assets by small and medium investors. But they are marketed with commissions that are more competitive than in the specific case of investment funds.
In any of the cases, they can be linked to different financial assets of all kinds. For example, equity sectors and indices, commodities and even the main precious metals (gold, silver, palladium, platinum, etc.). But with a very important value and that you do not need to go to their respective financial markets. If not, on the contrary, you can hire them through this product, which are exchange-traded funds or ETFs. They have become very popular among small and medium investors and with a great offer by the managers in charge of marketing this special product.
CFD, providing knowledge
CFDs allow you to use high leverage, to the point that you can trade for much more cash than your account balance. And therefore, with the option to bet on both the rise and fall of a financial asset. In any case, it is a difficult product to understand, and therefore from the CNMV considers that it is not suitable for retail investors due to its complexity and risk.
In this sense, there is no doubt that CFDs are very complex instruments and are associated with a high risk of losing money due to leverage. For this reason, it is not wise to hire them if you do not know how to operate with this investment model. First of all, you will have no choice but to assess whether you really understand how this financial product works.
But on the other hand, you will also need to analyze whether you can afford to take such a high risk of losing your money. Because the losses can be very large and of course higher than in the more conventional investment models. Ultimately, it will be necessary for you to meditate on the relationship between the risks involved in your operations and the possible profitability that you can achieve through this risky investment strategy. Because at the end of the day you must think that it is your own money that you are gambling. And in this aspect there are no experiments that are worth. Do not forget to avoid making mistakes that can pay dearly in the end. More than you might think from the beginning. You will have no choice but to assess whether you really understand how this financial product works.