What are the benefits and risks of derivatives is a common question many people ask before choosing to invest in this market. Let's introduce the advantages and disadvantages of derivative securities with PHS for investors to consider and choose!

Benefits of derivatives trading

• High leverage: With only a part of the contract value required to be deposited, futures contracts will give investors a very high level of leverage, making the profit received can be much higher than the investment. into stocks.
• Can buy/sell continuously during the day: If in stock trading, after buying shares, investors have to wait 2 days for stocks to return to their account to sell, then in futures contract trading In the future, the investor benefits from being able to immediately close an opened position (whether long or short). Thus, investors can continuously open and close positions during the session to seek profits on all market fluctuations.
• Opportunity to find profit when the market declines: Currently, in the stock market, investors do not have the tools to find profits in the falling market. However, with futures contracts, investors can completely do this. An investor may enter into a short position in a futures contract at any time, the only condition that must be met is the deposit of the required amount of margin before entering the contract. When the index falls as expected, the investor gets a profit from his futures sale.

Risks of Derivatives:

• Derivatives have the characteristics of large and fast price fluctuations due to the high leverage ratio, about 6 times, so when participating investors need to master the knowledge as well as prepare psychologically to avoid buying/selling too much. during the day according to price movements and result in losses.
• When trading derivatives, investors only make a partial margin, so if the price fluctuates against expectations during the session, investors need to immediately add money to avoid closing the holding contract to bring the account back safety level.