| Strategy type |
Description |
| Buy/Sell of the whole Russian stock market |
RTS Index Futures and Options may be a perfect instrument for trading on the rise or fall of the entire stock market and not on the single stocks fluctuations. Investors who believe in stock market growth can buy futures or Call options. Those who expect a fall can sell futures contracts or buy Put options. The size of the "leverage" for transactions with futures is 1:10 (the initial margin is 10% of the futures contract value). Buying options is attractive as well, because this operation gives the bidder an opportunity to receive unlimited profits and with only the premium at risk. Moreover, operations with options have even greater "leverage effect" than working with futures (since "leverage" depends on the size of the premium paid) |
| Hedging stock portfolio against the price fall |
In order to hedge losses caused by the fall of the stock market, investors who hold stock portfolios may sell futures contracts or buy Put options. As a result, losses on the stock market will be offset by the gains on the derivatives market. At the same time, with RTS Index futures and options it is possible to hedge the risks of the entire Russian stock market, rather than the specific risks of single issuer |
| Hedging cash flow from stock prices growth |
Organizations planning to place their funds on the stock market can hedge against premature stock market growth buying futures or Call options |
| Buy / sell of a "portfolio" copying the RTS Index structure |
Long position on the RTS Index futures is similar to creating a portfolio of 50 shares from the RTS Index composition. At the same time the costs of investor on the derivatives market will be much lower than on the spot market due to lower tariffs and no depository services fee or margin lending fee. Moreover, RTS Index futures gives an opportunity to "sell" a portfolio that is identical in composition to the RTS Index |
| Managing stock portfolios that do not copy the structure of RTS Index |
Futures and options on the RTS Index hedge not only risks of the stock portfolios whose composition is identical to that of the RTS Index. Market participants can hedge any portfolio, focusing on sensitivity coefficients of individual stocks to the dynamics of the RTS Index (Beta Ratios) |
| Making up a synthetic futures on the index with the "second tier" stocks |
Opening opposite positions on RTS Index futures and Blue Chips Index (RTSS) futures makes up a synthetic futures position on second-tier stock index. Such operations hedge a portfolio of second-tier stocks. Moreover, synthetic futures can be used as an alternative to buying / selling second-tier stock portfolio |
| Calendar spread |
The simultaneous trade of several futures and options with different settlement dates facilitate playing on the narrowing or diverging price spreads between them |
| Volatility buy/sell |
Options are the only one financial instrument that allows you to gain profit regardless of the stock prices and futures dynamics. Including option in portfolio you can build strategies that are profitable in volatile periods of the RTS Index. An example of such a strategy is a long straddle - the simultaneous buy of Call and Put options with the same strikes |
| Arbitrage and complex strategies |
Combining the RTS Index options and futures you can create synthetic futures or synthetic option positions. Differences in the prices of real and synthetic futures and options can be used to make arbitrage profit. Moreover, various RTS Index derivatives combinations with single stock futures and options result in complex strategies with different risk / return ratios. |
