Doctor of Economics, Professor, head of Department of banking of Kyiv National University of Trade and Economics
The independent expert, Luxembourg
OPTION OPERATIONS IN INTERNATIONAL MARKETS
Background. Derivatives are one of the most complex tools in the course of trade on international financial markets which give traders the opportunity to provide not only compliance of investment strategy but also achieve certain level of yield of optional portfolio for the acceptable level of risk. The appearance of the Internet gave the impetus to increased use of derivatives. Foundation and further development of trade on financial market with margin in Ukraine determine the necessity of theoretical principles disclosure and practice of formation of optional portfolio strategy by traders in foreign countries. The relevance of the topic is that in future such an instrument will be used by domestic traders more actively, and high level of risk demands not only the use of theoretical and practical knowledge but modeling and selection of own strategy.
The aim of the article is in disclosure of theoretical and practical bases of optional portfolio formation by trader.
Materials and methods. Research is conducted on the basis of scientific works of foreign and domestic scientists of the theory of the derivative financial instruments and practical experience of traders of financial market of Western countries. General scientific and special research methods are used.
Results. The world modern financial markets are characterized by rapid development of different kinds of financial transactions, in particular so-called derivative financial instruments – derivatives. Their use allows traders on financial markets to receive an opportunity to change the sensitivity of own investment portfolio to market volatility, also, to realize investment strategies faster and more economical. The authors improved an approach to the conventional method of choosing the optimal strategy of the portfolio options formation. It is conducted a comprehensive practical analysis of the measures of profitability provision and reducing f risks in option trading on OTC market and with margin on the Internet in the world financial markets. The author classification of optional positions is presented. It is created the suggestions on how to optimize the structure of the optional portfolio and making an investment decision by trader. It is suggested author recommendations for definition of optimal option portfolio structure as a means of its hedging against risks. Analysis of the main provisions on option market regulation in foreign countries is conducted.
Conclusion. The rapid growth of the amount of options trading on the exchange and OTC financial markets in foreign countries at this moment does not affect their development in Ukraine due to the extremely low degree of integration of the domestic financial sector into a global financial center. Foreign experience in the field of exchange derivatives trading in general, and options in particular reaches the middle of the last century, while in Ukraine this type of financial service is only in the initial stage of development. The active growth of amount and spectrum of financial services in Ukraine which are provided through the Internet network, has no noticeable effect on the development of financial derivative instruments due to lack of demand from the side of financial market participants.
Keywords: derivatives, put options, call options, stock options, options on stock indexes, forex options, option premium, trading with margin, hedge strategy.
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