Types of Derivatives

There are numerous types of derivatives. Since the real growth in the financial world has been in the derivatives market there are actually more types of derivatives than ever.

Interest rate derivatives are one type of derivatives. These types of derivatives allows traders to hedge against interest rate moves, minimizing the effect of a drastic rate move on their portfolios for instance.

The credit market has several more types of derivatives, as well. One type of derivatives is called a default swap. These derivatives are normally held to protect banks against an excessive number of defaults. However, with the real estate market bust, the default swaps that were issued were overwhelmed. These types of derivatives are in the news because the credit market froze up and large banks were holding these types of derivatives; consequently, they went belly-up.

There are other more exotic types of derivatives, such as weather derivatives that allow traders who positions are subject to erratic weather moves to secure some form of insurance.

The media has portrayed most types of derivatives as something to fear. At Online Investing AI we look at all types of derivatives as something to neither love, not fear. By creating advanced automated trading systems we are attempting to develop a trading system that leaves out emotions to make trades that have high returns at low risk levels.

It's also designed to help all traders--at all levels of size and experience.

Online Investing AI will make the trades directly to the investor's compatible brokerage account. The system can be used to manage an entire portfolio, or as a side portfolio to act as a hedge against the investor's other trading activities.

For more information about autotrading software, check www.OnlineInvestingAI.com and learn how to Get Rich Smart.