Derivatives
Futures, options, initial margin and variation margin — the mechanics, not the advice.
8 articles
Why leverage ruins the result even when the forecast is rightBorrowed money amplifies the return and, along with it, the chance of losing the position before being right pays off.
Expiration: what happens on the contract's last dayA cash-settled contract closes in money, a physically settled one in the real asset. Confusing them is expensive.
Hedging: insurance paid for with returnReducing risk through an offsetting position. It works, it costs money, and it is often used for the wrong purpose.
Structured products: where the risk is hiddenAn instrument with declared capital protection and capped income. It can only be understood by reading the terms in full.
Contango and backwardation: why a long futures position meltsThe relationship between near and far contract prices decides what holding a position beyond one expiry costs.
Options: a right without an obligationThe buyer pays a premium for the right to transact. The seller receives the premium and takes on the obligation.
Initial margin: why a position can be closed without youCollateral against an obligation whose size moves with volatility. It is what decides when you get closed out.
Futures: an obligation, not an optionAn agreement to transact in the future at a price fixed today. Binding on both sides — and that changes everything.