Features:
1, lever
Leverage is one of the most remarkable characteristics of financial derivative transactions, that is, traders can control more investment with less capital cost, thus improving the return on investment and achieving the goal of "making small and making big". When financial derivatives are traded, they usually only need to pay a certain percentage of margin or margin to obtain the management right and management right of related assets, and the leverage characteristic is very prominent. High leverage not only provides traders with the possibility of risk management at a lower cost, but also brings speculators the potential risk of huge losses caused by expected errors. Therefore, high leverage makes financial derivatives a double-edged sword.
2. Risk
Financial derivatives are a kind of financial innovation to protect investors' transaction value and prevent risks in the turbulent international financial market, but their inherent high leverage and high complexity and high technology of tool combination determine the high risk of financial derivatives. The risks in the financial derivatives market mainly include:
① Market risk. That is, the risk of financial derivatives losing money due to market price changes. The fluctuation range of financial derivatives often exceeds the fluctuation range of the spot price of the underlying assets, which brings great risks to traders.
② Credit risk. That is, the risk that the counterparty cannot perform the contract. This risk is mainly manifested in over-the-counter transactions, including the possibility of counterparty default and the amount of losses caused by default.
③ Liquidity risk. That is, some financial derivatives are difficult to circulate and transfer in the secondary market. The size of this risk depends on the standardization of contracts, the scale of market transactions and the changes in market environment.
④ Operational risk. Because all financial derivatives use advanced communication technology and computer network transactions, there are operational risks such as electronic transfer system failure, computer crime or human error.
⑤ Legal risks. In other words, because the innovation speed of financial derivatives is relatively fast, it may be outside the legal supervision, so there is a risk that some financial contracts will not be guaranteed and recognized by law.
⑥ Manage risks. It refers to the risk that the complexity of financial derivatives may bring difficulties and mistakes to the internal management of trading entities, and it is difficult for regulators to implement unified supervision.
3. Virtuality
Fictitiousness refers to the characteristic that the price movement process of financial derivatives is divorced from the real capital movement, but it can bring some benefits to the holders. The so-called virtual capital, such as stocks and bonds, is characterized by its own lack of value, but it is a power certificate representing certain wealth, so it is virtual to physical property. Financial derivatives are the further virtualization of basic assets such as stocks and bonds, and have dual virtuality. Since the appreciation of virtual capital can be independent of the movement of industrial capital and commercial capital, the transaction of financial derivative assets is increasingly independent of the movement of physical capital.
Reply time: 202 1-03-23. Please refer to the latest business changes announced by Ping An Bank in official website.
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