Trader Derivatives Simon Brown JustOneLap.com SimonBrown.co.za 13 th October 2011

Wealth warning Trading derivatives can offer significant returns BUT also subject you to significant losses if the market moves against your position. You may, in a relatively short time, sustain more than a total loss of the funds placed by way of initial margin. You may be required to deposit a substantial additional sum, at short notice, to maintain your margin balance. If you do not maintain your margin balance your position may be closed out at a loss and you will be liable for any resulting deficit.

Before you start System Risk management Product knowledge Realistic expectations Psychology Equities

Correlation You want to trade non-correlated assets BUT confirm the lack of correlation AND know the product

Market Maker Buying and selling at fair value Ensures products tracks underlying Other traders can get in the ‘middle’ of the market maker

Expiry Know expiry date Near dated vs. Further dated? Does your broker; close you out? roll your contract?

Costs All costs? % underlying value Flat brokerage Roll over costs?

Single Stock (SSF) Equities ETF’s

Index futures ALSI ALMI DTOP FINI

Options Warrants Index (including barrier) Equities Currency Commodity Instalments Equity

Agri futures Maize (white and yellow) Bread milling wheat Soyabean Sorghum Sunflower

Commodity futures Corn WTI Crude Copper Silver Platinum Gold Licensing agreement with CME Group

Currency Futures US $ Euro Sterling Australian $ All vs. The Rand

IDX Berkshire Hathaway Apple Nokia Shell Citi Dell Rio Tinto

Interest rate futures Bond futures Jibar futures Index futures

Re-cap WMD Know you product Know yourself

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Trader Derivatives Simon Brown JustOneLap.com SimonBrown.co.za 13 th October 2011