What is VIOP?
VIOP is the abbreviation of Futures and Options Market. VIOP is a derivatives market operating within Borsa Istanbul. Derivatives markets are markets where futures contracts are bought and sold. Forward contracts are contracts that undertake to buy or sell a certain asset (commodity, foreign currency, index, interest, etc.) on a certain date and price. The features of forward contracts traded on VIOP are standard and determined by Borsa Istanbul.
What are the advantages of VIOP?
The most important advantage of VIOP is that it provides hedging opportunity. For example, an investor who is exposed to foreign exchange risk can reduce this risk by buying or selling foreign currency futures contracts in VIOP. VIOP also offers speculation and arbitrage opportunities. Speculation is action taken to take advantage of future movements of prices. Arbitrage, on the other hand, is the transactions made to take advantage of the price differences of the same asset in different markets or at different maturities.
How to trade in VIOP?
In order to trade in VIOP, it is necessary to choose a brokerage house and open an investment account with this institution. Brokerage houses send buy and sell orders via electronic platforms to investors who want to trade in VIOP. Investors can place a buy or sell order by choosing the futures contract they want on the platforms. Orders are executed by Borsa İstanbul's matching system and transactions are recorded by Takasbank, the clearing house.
What should be considered in VIOP?
Here are some points to consider when trading on VIOP:
- Knowing the characteristics of futures contracts traded on VIOP (term, underlying asset, price tick, etc.)
- Not to forget that there is a leverage effect in VIOP. The leverage effect enables the investor to make large volume transactions with a small amount of capital. However, this increases both the profit and loss potential.
- Paying attention to collateral management in VIOP. Margin is the minimum amount an investor must keep in his account to buy or sell a futures contract. The margin amount may change according to market conditions and it is possible for the investor to receive margin calls.
- To follow and analyze the market movements in VIOP. Monitoring the factors affecting market movements (economic data, political developments, global events, etc.) and using technical and fundamental analysis methods support investment decisions.