In financial markets it is possible to make money both when prices rise and when they fall.

One way to extract all the juice down the markets when it is “getting short”, run down. Experts say that investors who only know how to make money in the upward movement of the stock fans are like roller coasters that only hit in the uphill sections. Both take advantage of only half of what is offered. You can take advantage of a fall in prices and indices.

short_stock

Investors do not waste more agile movement at all prices. Have fun, or they try, so when the train goes down and when the roller coaster. To make money just need to exist, in fact, movements large enough to be exploited. Their meaning or sign, should be indifferent. At least for committed savers performance times shorter. For speculators do not have that traditional association of ideas-good or bad, positive-negative-bullish-bearish.

Win with market declines

Investors buy stocks to use (or other assets or property) in the hope that rise and sell them later. But the opposite can be done to take advantage of the slopes below.

You can sell shares after repurchase expensive for cheaper. Although this maneuver is not permitted directly (broker call and give the order, without more, and then back), it is usually done frequently, especially if there is a degree of trust and reasonable proximity to the intermediary which courses and marry the order. This requires, however, a devilish agility, because the repurchase must be made on it in a few hours.

The legal-mode operations with credit-market is generally more cumbersome and, in practice, use only the investors who want to keep selling position for several days or weeks, or investors who want to leverage, market moving more money than they actually have in cash.

Reverse Fund Ibex 35

Now there’s a new formula to make money when prices fall. It is also a very simple formula, fast, fast and cheap. This is the new EFT reverse on the Ibex 35. It is a background quoted, issued by Lyxor Asset Management to be bought and sold as if it were a stock, but it offers tax advantages to be revalued funds as well as lower the Ibex 35. The derivatives market is often used by institutional investors as a method of coverage, to “insure” a portfolio of securities with the potential harshness of the financial markets.

But the market futures and options also offers the possibility of multiplying the investment potential in the short term, it allows investors to risk more aggressive. This market offers two clear opportunities to those wishing to use the gusts bearish stock markets. More aggressive investors may choose to sell the future. The gentle may need to choose the purchase of a put (option).

A new world for investment

The costs associated with an alternative and are very similar, so that the choice between them depends only on the degree of aggressiveness of the investor and its specific strategy. The maximum loss that can withstand the buyers of a put option is the premium paid, while for the sellers of a security future is deposited. The market for derivatives (options, futures and warrants) is the gateway to a new world for investors. Derivatives are used to speculate or to hedge risks aggressively. To multiply the possibilities for profit or to reduce potential losses. Derivatives allow you to earn money when Bag (Or the underlying asset in question) goes up and when prices fall.

High risk

But such operations are risky. The only way to avoid risks is to know. We need to know how much you can win but, above all, how much you’re willing to lose. Because futures and options can make big money with little investment, but you can lose everything you invested if things do not roll as planned. The advantage is that every investor knows at every moment what their maximum loss, compared with profit potential infinity.

Direct investment Bag For example, it is difficult for an investor to see how their actions are not worth anything, but it can happen. Derivatives often do. In return they offer great potential leverage (high earning potential with small expenditures) and a versatility that allows you to make money regardless of the situation and market trends. For example, the right to buy shares in Telefonica to 16 euros (that’s an option) is worthless when the company’s stock is publicly traded at 15 euros.