Gains in the stock market last year led to the rise of the value of financial asset portfolio of many. Customers manage their holdings on their own, now face a dilemma: how they can continue to enjoy the ups in the stock market, yet protect themselves from a case of a sharp drop in the markets.

Many experts argue that the stock market already reflect the full value of their recommend careful selection of individual stocks, along with portfolio diversification. For perfecting the growing need of the capital market, the options facing the individual customer, who wants to fence in his bag, becoming more diverse.

ETFs
One of the most popular tools in recent years are ETFs. These items are managing tens of billions of dollars, allowing linkage to local and the world stock market and currencies, metals and others.

Besides safe investment categories that provide a strong linkage to reverse the stock market returns, such as gold, there are ETFs that allow you to get exposure to reverse asset base. These index funds are shorting index funds. Between certificates that give exposure to the opposite index.

Some index funds even double inverse exposure. The cost of maintaining a higher short index fund cost of an ordinary certificate. Certificate Short height typically management fees of approximately 1% — 0.5% –  depending on the index and interest rates.

After the gains of the last period and since the leading stock indices already scraping the record of all time, it seems that more and more customers seek to protect themselves and demand certificates Short does. However, while holdings in ETFs linked indices are often long-term strategies, maintenance, shorting index funds is a short-term, since market players believe, rightly, that long term the market tends to rise.

Short papers can be purchased like any ordinary paper value. Any computerized system for acquisition of securities allows the purchase of such certificates, you can also purchase them at the point of sale with the bank clerk. In addition, staff recommends that prior to your purchase in the face of the clerk, what leverage the certificate at the moment. As the price of ETFs is changing, so leveraging the certificate against the index changes, you should consider before buying what.

PUT options
Stock Exchange issues a monthly index options on Derivatives, rate, rate other financial assets. These options allow using a relatively small amount of money, make an increase or decrease of indices point.

Put options allow it to earn as a decrease in the market, are beginning to “enter the money” to provide cash flow, when the index falls below the exercise price of the option premium. Each option exposes the buyer to 100 index units, which allow him to earn 100 dollars in fact any point in the index.

But the options on the market suffer from several problems. First, the acquisition cost could range of up to 7% of the transaction value in extreme cases, so that each case should bargain for the fee acquisition with a bank clerk. In addition, the market option expires every month again, what should the safe investor who wants to further exposure, “roll” the position next month purchase option, which means purchasing a new option every month.

Disadvantage arising from this possibility is that the cost of this tactic over time, may be very heavy to reach 25%  of value case every year, even more than that. This price makes the option on the stock market, as an insurance against a financial instrument declines should not, but because safe investors have now more options.

There is another alternative: there are options and Put-Call options  traded on overseas indices which expire once every six months or a year. This significantly Discounter maintenance options, because there is no need to roll them every month and can hold them for a longer period.

Global world stock markets have correlation among themselves so that experience has shown that options on indices such as NASDAQ, the German DAX have a correlation with the local market. Therefore protection against declines in portfolio managed by foreign Index Put options, is a form of action that can make much sense.