Trading & Rebalancing for Investment Management strategy, solutions & risks

1. TRADING AND REBALANCING FOR INVESTMENT MANAGEMENT STRATEGY & SOLUTIONS +45-25685705 www.investmentexcel.com info@investmentexcel.com

2. Indeed, the financial value created by the trading, have made them MUST PICK choice in the stock market, but just like any other financial platform, they are also not free from risk, rather the primary risks associated with trading derivatives are market, counterparty, liquidity, and interconnection risks. • Read on to know what potential strategies have to be considered while trading. +45-25685705 www.investmentexcel.com info@investmentexcel.com

3. Market Risk • In the world of the stock market, market risk is nothing uncommon and is a very general term in any sort of investment. • Every investment is based upon the decisions which take place on the basis of assumptions, technical analysis or other factors, which sum up to an expectation that how a certain investment would perform. • However, to avoid the horror of risk, with the investment analysis, you can understand the possible chances for an investment that whether it would turn profitable or would bring more risk ratio. +45-25685705 www.investmentexcel.com info@investmentexcel.com

4. Counterparty Risk • Counterparty risk is also called the counterparty credit risk, which generally arises, when one of either a buyer or a seller, involved in a derivatives trade, defaults on the contract. • Indeed, the risk gets higher in OTC markets, as they are less regulated than trading exchanges. • With the regular trading exchange, you can facilitate contract performance through margin deposits, which are further adjusted via the MTM process. • The mark-to-market process lets the pricing derivatives to be accurately reflecting the current value. +45-25685705 www.investmentexcel.com info@investmentexcel.com

5. Liquidity Risk • If an investor plans to close out a derivative trade much before the maturity, then Liquidity risk applies. • In such situations, investor needs to analyze if it is at all possible to close out the trade or if existing bid- ask spreads are so large to represent a significant cost, in accordance with he/she must take the final call. +45-25685705 www.investmentexcel.com info@investmentexcel.com

6. Interconnection Risk • This risk refers to the interconnections between various derivative instruments and dealers, which ultimately affect the investor & particularly derivative trade. This risk is usually caused by the chain reaction; however the main dealer causes the problem in the derivatives market. • Thus investor needs to be fully updated and must reduce the causes which threaten the stability of financial markets. • The strategies listed above, clears the air that it can be a tough market for amateurs, this it is advised that only traders with high experience in trading must go with the derivatives market. • Indeed, the stock market investment can be a great help in this league, but the right experience and the experts’ advice is necessary to go along with it, and this can easily be achieved with the professionals from Investment Excel. • This very platform is offering the stock market advices through the hands of experts who hold the 15+ years of extensive experience and share the tips and tricks to overcome the burden of naivety in the field. +45-25685705 www.investmentexcel.com info@investmentexcel.com