Chapter 16. Market of derivatives on stock exchange indices

Due to the fluctuation of stock exchange indices, futures and options on stock exchange indices have become very popular in the derivatives market. The essence of the derivatives market is simple: a futures contract on a stock index is purchased at a price equal to the value of the index on the day of purchase. Upon closing of such a futures contract its profitability and unprofitability is determined, which depends on the formed price on the day of closing of the futures contract. Thus, if the stock index is at 720 points, the futures on this index will cost 720 $. And if at the end of the day the index on the derivatives market has risen to 740 points? Then the investor can close this position and get a profit of 20 $. Transactions on options on the derivatives market are also carried out in the same way.

Ежегодно в Соединенных Штатах около 30% всех заключаемых на рынке деривативов срочных контрактов, являются опционами или фьючерсами на биржевые индексы. Этот показатель в Японии превышает 50%. По-сути это – чисто спекулятивные сделки. В Европе же доля операций с индексами на рынке деривативов существенно ниже. Например, в ведущих странах Западной Европы (Франции, Великобритании и Германии) свопы, опционы и фьючерсы на биржевые индексы не превышают 15% от общего объема заключаемых на биржах сделок.

In Russia, the RTS exchange also allows operations with futures contracts on exchange-traded indices on the derivatives market – the RTS index and industry indices: the RTS oil and gas index, the RTS consumer goods index and the RTS telecommunications index. Such futures have become the most popular investment instrument on the FORTS derivatives market section.

In further chapters of our training you will learn how to trade on the stock market, who are brokerage companies and how to choose them correctly. We will also review one of the programs for Internet trading.