Portfolio optimisation is a key aspect of financial planning and investment strategy. It involves balancing risk and return to create a mix of assets that align with an investor's financial goals and risk tolerance. While equities, bonds, and mutual funds often dominate the conversation, derivatives have emerged as powerful instruments for enhancing portfolio performance and managing risk.
In recent years, retail and institutional investors alike have begun exploring derivative trading to strengthen their investment portfolios. This article explains how derivatives work, their benefits, and the role they play in building an efficient and well-hedged portfolio.
