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Trading knowledge # 4

What are the duties of a finance manager?

A custodian or custodian is a financial institution that securely holds customers’ securities to prevent their theft or loss. Custodians are responsible for the safety of assets and securities and provide services including processing trades, investing cash on demand, collecting income, processing corporate actions, valuing securities positions, and providing record keeping and reporting services.

What role does a financial exchange play?

A stock exchange is a marketplace on which stocks, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for all financial instruments traded on this exchange.

What is the role of financial regulators?

A regulatory authority authorizes, supervises and regulates financial institutions operating in a country in order to ensure the soundness of the entire banking and financial system. This supervision enables financial institutions to operate and offer efficient banking and financial services.

RISKS AND OPPORTUNITIES FOR COMPANIES AND INDIVIDUAL INVESTORS – Portfolio Diversification –

Portfolio diversification is the process of investing your money in different asset classes and securities in order to minimize the overall risk of the portfolio.

For both companies and retail investors, access to markets that allow building a diversified portfolio is an important aspect of managing futures-oriented accounts.

Similar to risk management, market-to-trade would be a key variable to clearly state and support the reasons for trading or investing. Reasons for choosing one market over another can be price volatility, liquidity, daily traded volume, size of the minimum price increase and the value of the minimum price increase. Comparing these variables across markets will help determine the suitability and / or risk of each one.

For example, for a price driven strategy, the parameters can be designed to be applied to any market, be it index stock futures or forex futures. However, the entry signals may not always be triggered if a trader is only focusing on a single index stock future such as the Micro MSCI USA Index Futures.

Access to other futures markets to use the strategy to allow building a diversified portfolio with different entry and exit points, or the opportunity for more trading-oriented investors, increased the opportunities to implement price-driven strategies more frequently in a number of futures markets .

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