Enhancing returns and managing risk for holders of stocks, gold and Bitcoin

Written by Bryan Coyne, NED of Kasei, a UK-quoted company invested in a managed portfolio of cryptocurrencies

The core concept:

The derivatives industry is massive and is estimated to be over $1.2quadrillion in size and, while many think of derivatives as tool to enable one to leverage exposure to an asset, to enable speculation in reality the derivatives market plays a vital role in enabling business to manage risk and provide liquidity. NYIM remind us: “In finance, there are four basic types of derivatives: forward contracts, futures, swaps, and options.” Essentially, derivatives serve as powerful financial tools that enable companies to navigate uncertainties in markets, improve operational efficiency, and achieve strategic objectives while managing associated risks effectively. However, improper use or over-leveraging in derivatives can lead to significant financial losses, underscoring the importance of prudent risk management practices. While the derivatives market is huge typically, it is only used by sophisticated or institutional investors.

In the UK, the FCA details rules around the u…