These days, people have numerous options to invest in. It is a tale of the past when people used to invest only in banks as fixed deposits. Investors have to count on investment banks to identify the most suitable financial instruments that they can invest in. It is interesting to note that investment banks sometimes engage in the smooth trading of financial instruments to ensure smart investments.
Of all the instruments that are available in the market, derivatives are being preferred widely and are being used all across the globe. Due to its surging popularity, investment banks are also hiring individuals with extensive knowledge of the derivative markets. This article will help you learn derivative market and why it is gaining popularity.
What is derivative market?
The derivative market comprises a number of financial instruments that can be used for trading. Derivatives consist of financial contracts, the value of which is dependent on other assets. One can trade it either on the stock exchange or from a dealer. The value of a derivative can also be dependent on a group of other assets. An investor has to analyse properly and place a bet on a financial instrument’s future price. This can fetch them huge rewards, making it an extremely profitable career.
The functioning of the derivatives on the stock exchange happens following a set of regulations. Nevertheless, one cannot ignore the fact that the trade of derivatives is prone to huge risks. However, people are still attracted to it because of the huge returns that it fetches. Building a career in derivative markets is also another way in which investors are safeguarding themselves against market volatility.
Players in the derivative market
There are a number of participants in the derivative market. They are as follows:
- Margin Traders: They count on collateral for conducting transactions using financial instruments. Marginal traders have to keep something as collateral to the counterparty in exchange for trading financial instruments. This also helps to cover the risk which might arise at the time of trading financial instruments.
- Hedgers: The reason why these investors invest in the futures market is that they want to safeguard themselves against price volatility. For hedgers, investing in the exchange market is a great way to protect against any changes that may arise in the future market.
- Arbitrageurs: These investors are the ones who earn profits during times of price volatility. They make profits from price differences that arise between markets.
- Speculators: These are the investors who foresee the future and invest in the financial instrument which can provide a great deal of value in the future. Speculators are always prone to risk because they need to predict the value of the financial instruments and assume which will be of high value.
You can opt for an online course in investment banking that will teach you about the differences between the different kinds of players in the derivative market. All these learnings will help you build a lucrative career as an investment banker.
What do the derivative market courses equip you with?
The best online courses will help you acquire the knowledge through practical training that will make you job ready. The courses come with certification. Some of the courses include case studies and real-time discussions, which will prepare you for the real world. The training is often conducted by experts with commendable experience working with leading investment banks. You can also choose an online investment banking course with placement opportunities to bring your career on track. After the course completion, you will also get placement support. The live courses are facilitated by experts who have worked in leading companies. You can also opt for an offline programme.
The online CIBOP (Certified Investment Banking Operations Professional) course by Imarticus will help you build a lucrative career. It is ideally suited for finance graduates with 0-3 years of experience. The course spans 150 hours. More than 1000 batches have availed benefits of the course to date. The average salary that learners will draw after completing this course is ₹5 LPA. Once you opt for this course, you can expect an approximately 60% hike in salary. Certification will add to your job profile and definitely improve your career prospects.