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Derivatives or the sharemarket?

  1. Nov 24, 2008 #1

    danago

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    I am currently in the process of deciding exactly how i want to structure my future degree (BEng/BCom), and have come to a bit of a hurdle. As part of my BCom degree (majoring in investment finance), i need to decide whether to go down a "trading on the stockmarket" stream or a "derivatives" stream. To begin with i had absolutely no idea what the derivatives markets were, but i have since done some reading and now have a basic idea.

    Is derivative trading really only for those who do it as a career? The reason i ask is because i always hear of people talking about the stockmarket, but i never hear anything about derivatives, which makes me think that perhaps the stockmarket trading stream will be better suited to me, since i plan on going into engineering work rather than finance.

    If anybody has any input into the matter id be greatly appreciative.
     
  2. jcsd
  3. Nov 25, 2008 #2
    I assume by this you're asking whether individual investors trade in derivatives, and the answer is yes, though certainly not in the same way an investment bank does. Derivatives are (somewhat) more complicated instruments though, and not good for "buy and hold" philosophies, so you see a lot less of them used by small investors.

    If I were in your shoes I'd definitely go the derivatives route. There's really not all that much to the stockmarket without derivatives, and you could probably pick all that up with simple readings (and most of it will be of questionable value anyhow). Pricing derivatives is more complicated, though whether it's more useful will depend on where you work later. Personally I also find it a lot more interesting as well.

    My opinion, take it for what it's worth.
     
  4. Nov 25, 2008 #3

    danago

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    Thanks very much for the reply, i will definitly take that into consideration.
     
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