With much certainty that on occasion you will have heard about the futures markets and you may have even been tempted to make investments through this instrument. However, perhaps ignorance of this financial product has made you withdraw from performing operations that are substantially different what are the buying and selling of shares in the stock market. So that from now on nothing better will happen to you than knowing what this investment model consists of.
Well, futures markets are basically the development of contracts for the purchase or sale of certain materials at a future date. Where an agreement is reached with the present the price, the quantity and even the expiration date. At the moment it is available in the stock markets, but do not forget that it can affect a good part of the financial assets that are regulated in the equity markets. As an alternative that you have to make the savings profitable from now on.
Futures markets are very similar to buying and selling stocks on the stock market, but they are not really the same thing. If you want to invest through this special financial product, you should know above other considerations that it is listed at the times when stock markets are closed. In this way, you will be in a position to take advantage of movements that occur at another time of day in which you cannot carry out your operations in variable sale. In this way, you can benefit from the publication of reports, studies or other analysis tools that are published with the exchange closed.
Futures market: origin
This class of financial markets had its origin at the end of the XNUMXth century and as a source of reference towards materials. Among those that stood out above all coffee, wheat, oil and soybeans, among some of the most relevant. Not surprisingly, it was considered a product that is closely linked to this class of financial assets, so atypical for many small and medium investors. To the point that they are not included in their investment portfolios.
On the other hand, it cannot be forgotten at any time that it is a market characterized by periods of concentration of supply (harvest) and by highly variable prices throughout the year, which made the work less attractive. This fact makes it somewhat common for them to be listed on the futures markets almost everywhere in the world. Where you can make it profitable based on the preferences you have in each of the moments and as if they were stock market values.
Investment based on speculation
This class of financial markets are characterized by their high speculative component, where there is a lot of money that you can earn in the operations carried out. Although also leaving you a lot of euros what you leave along the way due to the special characteristics of this financial asset so special for a good part of investors. On the other hand, these are markets that are subject to high price variations and as a consequence, investors assume the risk with the prospect of obtaining future benefits. As the main difference with respect to traditional stock market operations.
Another aspect to take into account in this kind of stock market operation is that you are not only in a position to carry out operations in agricultural matters but also in financial assets, minerals, currencies, etc. And another particularity that should not go unnoticed from now on. It is none other than that the liquidation does not have to take place at maturity, but that this movement is already clearly a minority among small and medium investors. In any case, it is an investment that is much more complex than the others and that is more assimilated in the so-called derivative products. Where the risk is significantly higher than in others.
New futures market
In any case, good news for your personal interests is derived from the fact that new opportunities are opening up to invest in this product from now on. Because in effect, since last year, it is possible to operate in currency futures because the Official Market of Options and Financial Futures in Spain (MEFF) is going to launch new futures contracts on currencies under the name of FX Rolling Spot Future.
The MEFF is an organized market regulated, controlled and supervised by the National Securities Market Commission (CNMV) and the Ministry of the Economy of Spain in which different financial derivatives are traded. Where various classes of futures are included in which you can open positions to make your money profitable at any time. With the application of commissions that are very similar to those generated from the purchase and sale of shares on the stock market.
Creation of new indexes
As of last year, BME has begun to disseminate, through the main providers of stock market information, the volatility indices and strategies with options on the Ibex 35. These indices, which will be published at the close of each session, make it possible to measure implicit market volatility and show the performance of certain investment strategies through products traded on MEFF, BME's derivatives market. As a new opportunity to invest money from a different strategy with the models with which you were operating until now. These are some of the most relevant that you have at your disposal.
The index VIBEX is the index of implied volatility of the Spanish market. It measures the implied volatility of the options of the selective index of the variable income, the Ibex 35 for a maturity of 30 days.
The index IBEX 35 SKEW shows the evolution of volatility skew in IBEX 35 options. The volatility skew is defined as the volatility differences of each exercise price. With a clearly speculative character and with a lot of risk on the operations carried out by investors.
On call and put positions
The index IBEX 35 BUYWRITE replicates a buying position in the future of IBEX 35 and a constant sale of Call options, therefore, it is a strategy similar to the purchase of a IBEX 35 basket with the extra income from the sale of the option.
The index IBEX 35 PUTWRITE replicates a constant sale of Put options. It is a bullish strategy with the profit limited to the premium entered and with the unlimited losses.
The index IBEX 35 PROTECTIVE PUT replicates a buying position in the future of IBEX 35 associated with a constant purchase of Put options. It is a bullish strategy with limited losses and unlimited profit, equivalent to a Call purchase. It behaves very well with sudden movements of the index, having worse behavior with smooth movements. Or in vain, its flexibility is one of its most pronounced characteristics from any investment strategy.
The index IBEX 35 SALE OF STRANGLE replicates a constant sale of Put and Call options. Corresponds to a neutral strategy (not bullish or bearish) that expect low volatility and that has the benefit limited to the premium entered. Given that its performance is marked by volatility, it is an index with a very low correlation with the IBEX 35®, thus increasing the diversification of the portfolio.
For very specific profiles
Any of these bets in the equity markets can already be carried out without excessive problems from the usual banking entity. As one of the great alternatives that have emerged in recent months and that can even be used to diversify any kind of investment. Although it is more reserved for a profile of rather aggressive investor and that he has great knowledge of financial markets. If it were not this way, it would be better that you abstain from these operations since you could lose a lot of money in each of the movements developed.
On the other hand, with the dissemination of these new instruments, through a wide range of investment strategies and more information, you will have a wide range of strategies to take advantage of market volatility. Especially in a year like the current one where uncertainties generated by the stock market It is greater than ever and you may not have to change your financial product to make your personal assets profitable during the next twelve months or even during a significantly longer period of stay.
One of its main contributions lies in the fact that from now on you will have more options where to invest. Without having to limit yourself to buying and selling shares on the stock markets. So that you can choose between different investment strategies, from the one based on volatility to those provided from the different raw materials that are listed on the financial markets. Through an investment model that trades at any time of the day, even in some cases at night and on weekends. So that the stock market is not the only investment proposal.