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Investing for Dummies, 4th UK Edition by Tony Levene

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Chapter 20

Delving into Derivative Investments

In This Chapter

arrow Understanding derivatives

arrow Gearing up your risks

arrow Trading the options market

arrow Taking a trip to the bookmakers

arrow Considering contracts with differences

arrow Looking at warrants

If you have a nervous disposition, you may want to skip this chapter. It’s all about how you can lose not just your shirt but everything else you own. It covers the one investment opportunity in this book from which you can end up with more than minus everything, because not only can your investment money go down to zero, but you also can end up owing cash over and above those losses. Very financially painful!

That sounds unbelievably awful, and it can be. So why should you grit your teeth and read this chapter? Because these types of investments, called derivatives, are advertised everywhere. They include contracts for difference, spread bets, traded options ...

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