There are many myths about derivative strategies. Most of the popular derivative strategies have less than 50% probability of making profit. Their risks/ return characteristics are often less than one. Many of them result in unlimited losses under exceptional circumstances. In the modern world appearance of Black swans is frequently observed. This is due to the globalisation of the world financial markets. In an individual’s life exceptional circumstances appear in every body’s life once or twice. More often these exceptional will ruin the person permanently.Therefore neglect in taking these exceptional risks into account when trading is like inviting disasters.
- However there are exceptional strategies that provide reasonable returns with very limited risks. These strategies provide ways and means to reduce risks as well. This is a book about such strategies too. However success is always equal to the sum of expertise and luck.
Author: Cyriac Kandathil
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