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There are many myths about derivative strategies

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 […]

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Derivatives- The Boogeyman’s stick

Blaming derivatives for human failures is quite unfair. Those who used derivatives to reduce their risks have never lost. But those who bought risks out of sheer greed have failed when unexpected developments happened. Derivatives have their good sides and bad sides.In the hands of the misinformed they are weapons of mass destruction and Governments […]

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Option strategies

Derivatives are designed to reduce risks of investors in stock markets, currency markets and commodity markets. Risk is inherent in all business activities. A ship is safe inside the harbor. However it faces risks when it moves out of its safe abode. But keeping a ship inside the harbor does not make any sense as […]

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DIY cookbook 2. How to stop losing money in stock market.

In the last lesson we spoke about trend lines. Today we will talk about moving average. A moving average is an average of the stock price over a given period of time. You will find some free charting tool like the one that I am using. You can also get a charting tool from your […]

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