Comments on: Why derivatives are in lot sizes? http://etrade.im/599-why-derivatives-are-in-lot-sizes All about Trading Online Thu, 09 Sep 2010 09:07:39 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Maulik Bhatt http://etrade.im/599-why-derivatives-are-in-lot-sizes/comment-page-1#comment-2079 Maulik Bhatt Wed, 10 Mar 2010 09:18:59 +0000 http://etrade.im/599-why-derivatives-are-in-lot-sizes#comment-2079 I understand your disappointment that derivatives are not available in small size lots. But tell me one thing: if derivatives are available in lot of just 1 share, what will be the difference between equity share and derivatives? Why would anyone trade in equity share, if derivatives contracts will also be available in such a small lot? The thing is that derivatives are not for everybody. They are for those, who have already bought equity shares and who want to reduce their risk of price change in adverse direction. Big lots are kept so that speculators can be kept away from the market.<br><b>References : </b><br> I understand your disappointment that derivatives are not available in small size lots. But tell me one thing: if derivatives are available in lot of just 1 share, what will be the difference between equity share and derivatives? Why would anyone trade in equity share, if derivatives contracts will also be available in such a small lot?
The thing is that derivatives are not for everybody. They are for those, who have already bought equity shares and who want to reduce their risk of price change in adverse direction. Big lots are kept so that speculators can be kept away from the market.
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]]> By: Beau.Gus http://etrade.im/599-why-derivatives-are-in-lot-sizes/comment-page-1#comment-2078 Beau.Gus Wed, 10 Mar 2010 09:07:59 +0000 http://etrade.im/599-why-derivatives-are-in-lot-sizes#comment-2078 Because there are not enough "punters" foolish enough to trade in small volumes of derivatives, (which are primarily a hedge-tool for institutions) to merit "market makers" in the derivative market. Remember I said that when you've lost enough money that you give up...<br><b>References : </b><br> Because there are not enough "punters" foolish enough to trade in small volumes of derivatives, (which are primarily a hedge-tool for institutions) to merit "market makers" in the derivative market.

Remember I said that when you’ve lost enough money that you give up…
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