March 2023

Wealth lending is a concept that has gained significant popularity among investors in recent times. The idea involves using assets, such as stocks or mutual funds, as collateral to secure a loan. This type of lending offers numerous potential benefits, particularly to online equity traders. By borrowing against their assets, investors can access additional liquidity that can be used to invest in the stock market or meet other financial goals.

Read on to explore the relevance of wealth lending in UAE for online equity trading and learn how this facility can be used to maximise returns.

• Increased Liquidity

One of the main benefits of wealth lending for online equity traders is the increased liquidity it offers. Liquidity refers to the ability to access cash or other assets quickly and easily. In online equity trading, liquidity is critical because it allows traders to take advantage of market opportunities or react to changes in market conditions quickly. However, online equity traders often face liquidity challenges, particularly when investing in long-term assets such as stocks, mutual funds, or other securities.

Wealth lending offers traders an opportunity to access additional liquidity without selling their long-term investments. Instead, traders can use their assets as collateral to secure a loan. The amount of liquidity available will depend on the value of the assets used as collateral, but traders can typically borrow up to 50% or more of the value of their assets. This approach provides traders with the ability to invest in the stock market or pursue other financial goals without disrupting their long-term investment strategy.

• Diversification Opportunities

Another benefit of wealth lending for online equity traders is the opportunity to diversify their portfolios. Diversification is a key strategy in online equity trading because it reduces the risk associated with having all your investments in a single asset class or sector. By diversifying their portfolio, traders can reduce the overall risk of their investments and potentially achieve better returns.

Wealth lending provides traders with additional liquidity, which can be used to explore different investment opportunities. For example, traders can use borrowed funds to invest in different sectors, industries, or asset classes. This approach provides traders with a more balanced and diversified portfolio, which can be less vulnerable to market volatility or economic downturns.

• Reduced Opportunity Costs

Selling existing investments to access liquidity comes with a cost, namely the potential opportunity cost associated with missing out on future gains. Wealth lending provides traders with an opportunity to avoid this cost by borrowing against their assets instead of selling them. This approach allows traders to maximise their potential returns and avoid missing out on future market gains. Additionally, because the trader retains ownership of their assets, they can continue to benefit from any future market appreciation or income generated by their investments.

To Conclude

Wealth lending provides online equity traders with a flexible and convenient way to access additional liquidity, diversify their portfolios, and avoid opportunity costs associated with selling existing investments. With wealth lending, traders can use their long-term assets as collateral to secure a loan and access additional funds to invest in the stock market or pursue other financial goals. This approach allows traders to maintain their long-term investment strategy while taking advantage of market opportunities or responding to changes in market conditions. Therefore, considering wealth lending as a part of an online equity trading strategy can provide traders with a range of benefits and potentially improve their overall investment performance.

Are you looking to ramp up your investing game? Do you want to capitalise on market volatility and protect against portfolio losses? Trading VIX options could be the perfect way to achieve these goals. The CBOE Volatility Index (VIX) is the fear gauge of Wall Street and measures how much investors think the stock market will move over the next 30 days; this makes it an excellent tool for hedging portfolios during periods of high volatility.

In this article, we’ll take an in-depth look at trading VIX options, from what they are and their advantages & disadvantages, to when to buy/sell them. So, if you’re ready to enter into one of the most lucrative markets out there – let’s get started.

What are VIX options, and how do they work

VIX options are a hedging tool that can be used to protect against large market swings. They are financial derivatives of the CBOE Volatility Index, or VIX, and allow traders to increase their risk-reward profile. When going long on VIX Options, investors gain the right to buy or sell a certain amount of the VIX index for a predetermined price at a future expiry date. However, traders must know that these options become illiquid during high volatility.

Additionally, as with any options contract, there is always an opportunity cost and downside risk. All considered, should you consider incorporating VIX options into your trading strategies, it is essential to fully understand them before taking on such an endeavour.

How to trade VIX options

Trading VIX options is best done on a reputable online trading platform. As an Australian option trading platform, Saxo Markets provides traders with access to more than 10,000 instruments, including all major global indices and commodities.

To begin trading VIX options on this platform, you’ll need to open and fund an account. Then you can use the online tools available to devise a strategy for your trades. It’s essential to keep an eye on news reports and economic data as these could affect market prices. It would help if you also considered using stop-loss orders or trailing stops which automatically close out positions when certain thresholds are met – helping you manage risk more effectively.

Finally, once your position is open, you’ll need to monitor the price movements and adjust your strategy accordingly closely. It could involve closing out positions or adding more contracts if required.

The benefits of trading VIX options

The main benefit of trading VIX options is that they offer investors the chance to hedge their portfolios against market volatility. This means that traders can reduce risk while still benefiting from potential trades should prices move favourably in the direction of their trades.

Furthermore, VIX options also tend to have relatively low transaction fees compared to other derivatives, making them cost-effective for both medium and long-term investments. Lastly, as these options are traded on a regulated exchange, traders have some protection from fraudulent activity which could be encountered with OTC markets.

Tips for trading VIX options successfully

If you plan to trade VIX options, there are a few tips to bear in mind for successful trading. Firstly, have a clear strategy and stick with it. While staying up to date with market news is crucial, try not to let short-term events sway your decisions too much.

Secondly, be sure to use different strategies when going long and short – this will help minimize losses should the market move against you unexpectedly. Finally, don’t forget to use risk management tools such as stop losses or take profits if they are available on your chosen platform. These can protect against volatile markets and ensure you get the most out of every trade.

The risks associated with trading VIX options

Although trading VIX options can be lucrative, it does come with a degree of risk. It’s important to remember that the value of these derivatives is heavily dependent on market sentiment and volatility rather than underlying asset prices – meaning they could become worthless at any time.

Additionally, traders need to account for transaction fees when trading these instruments since they tend to be more expensive than other derivatives. Lastly, there is always the potential for fraud or manipulation in an unregulated environment, so ensure you do your research and only use trusted brokers and platforms.

In conclusion

While VIX options offer traders an opportunity to hedge their portfolios against volatile markets, risks are also associated with them. Careful planning and strategy implementation are essential to ensure successful trading. Additionally, traders should use available risk management tools and only trade on secure platforms. With the right approach, VIX options can generate consistent returns in both medium and long-term investments.

We all know the importance of a term life insurance policy. It helps you protect your family’s financial future. If something happens to you, the insurer will pay the death benefit, i.e., the sum assured to your family. They can use the amount to take care of their everyday expenses and be financially independent.

If you don’t have life insurance coverage yet, now would be the best time to purchase one. Buying a new term insurance plan in 2023 would be especially beneficial. The sooner you buy, the lower the premium will be, as the premium rates depend on the entry age. Apart from the premium, there are other vital factors you must consider to get the best coverage.

Let us look at how to buy the right term insurance plan in 2023.

• Choose the right coverage amount

The most critical step in buying a term insurance plan is knowing the coverage you need. If you purchase a term plan with a lower sum insured, your family may not have enough funds to take care of their needs, and they may face financial stress later on.

If you are unsure how to choose the right coverage, you can follow the thumb rule. Experts recommend that the sum insured of term life insurance must be at least 10-15 times your annual gross income. However, this is not a hard-and-fast rule. You must choose the right based on your liabilities, dependent members, other income sources, and family’s lifestyle.

• Be aware of the insurer’s claim settlement ratio

Few people understand the importance of checking the insurance company’s claim settlement ratio while buying a policy. The ratio indicates the number of claims the insurer has successfully made within a specific tenure against the number of claim applications received in the same period.

For example, if the insurer’s claim settlement ratio is 50%. It means the insurer has paid for 50 out of 100 claims. So, it is better to choose an insurance company with a high claim settlement ratio so that your family gets the compensation without any hassles.

• Don’t forget to add the nominee’s name

When you fill out the term life insurance application form, make sure to provide nominee details. It is better to choose your closest family members, like spouse, children or parents, as the nominee. If you purchase a term insurance plan under the Married Women Protection Act, you can be assured that the insurer will give the death benefit to your wife and children.

• Purchase riders

 When you buy a term insurance plan, you must consider purchasing a rider or add-on. A rider is an additional benefit that allows you to protect against specific risks that are not covered under the standard policy. However, you must know that a rider comes with an additional cost. So, assess your needs carefully and choose only the necessary rider to get additional protection and yet keep the premium affordable.

Some of the standard riders most people buy with term insurance include–

• Critical illness rider
• Income benefit rider
• Premium waiver rider

Final Word

Now that you are aware of the tips to purchase the right term insurance plan in 2023 do your due diligence, and get the best policy that suits your needs and budget.

Financial planning is an important part of every adult, be it in his/her 20s, 30, 40s and so on. It is, in fact, one of those crucial things that can make or break one’s future. If you are someone who plans on getting more serious about your finances or wants to up your financial planning game, this article is for you. Read on to know about the various ways in which you can plan your finances in 2023.

Set A Budget: Budget setting is a very crucial part of your financial planning. This process will help you ensure that you are not spending more than you should on certain things. When you spend in a limit, more often than not, you will have enough money to park elsewhere. In order to be able to do the same, you first need to take into account all of your current income sources, your debt (if any) and the activities that take money out of your pocket. And then, you need to figure out the areas in which you are going overboard in terms of spending.

Get A Credit Card: Credit cards are a great way in which you can plan your finances. There will be times when you need to pay big bills or purchase something expensive out of necessity. This is where you can use a credit card to take care of such expenses and then pay for it later. In such a way, your personal account balance will not take a big hit. Alternatively, you can pay with the card and pay off your dues ahead of time. That way, you will get reward points as well. So, in a way, you will make the most of your money through a credit card. If you are considering getting a card, you can consider taking a look at the instant Airtel credit card.

Invest In Shares and Mutual Funds: Quality company shares or mutual funds are an ideal place for you to park your savings. You must consider putting some money here as well so that you have a safety net to fall back on a few years down the line. It could also perhaps serve as a retirement fund for you since stock market investments generally have given the investors phenomenal returns over an extended period of time. Some stock market investments also give handsome returns in terms of dividends and bonus shares. Some of the mutual funds also get you a tax rebate of a few lakhs in some cases.

Open alternative income sources: You can even perhaps upskill yourself and learn a trade you can do outside of what you are doing for a living right now. Alternatively, you can even turn your hobby into a revenue stream. Such an act will help you earn more, save more, invest more and even get out of debt faster.

Conclusion

There are many ways through which you can become more financially stable, but the ones mentioned above are the most crucial aspects of the same. If you manage to do the ones above with discipline, your future self will thank you for sure. If you are a student who has a part-time job or is getting enough allowance, you can even consider getting a student credit card from the likes of Airtel, for example, to make the most out of your money.

Weddings are often costly, but the significance of this landmark in life is immeasurable. That’s why many couples make huge investments to mark the momentous occasion. Many factors such as location, number of guests, and individual preferences contribute to the hefty cost of a wedding. However, venues usually eat up a significant portion of the budget averaging Rs. 70,000. When you add other small expenses like the photographer’s expense and wedding dresses, the cost can be very high.

For couples looking to amass the necessary funds for their dream wedding, taking a loan is a viable option. Commonly referred to as “wedding loans,” they are personal loans that can be availed instantly. By applying for this type of loan, you can cover your costs without breaking the bank, making it easier for you and your partner to achieve wedded bliss.

Before securing a personal loan for a wedding, it is essential to understand some of the things involving wedding loans. You should familiarize yourself with any potential risks of taking out such a loan and ensure you understand all terms included.

What’s a Wedding Loan?

Wedding loans are not just one type of loan. You don’t just go to a bank and apply for a wedding loan the way you would with a mortgage loan, but some banks offer “wedding loans.” These usually come in the form of unsecured personal loans that can be used to cater for wedding expenses.

As more online lending options become available, wedding loans are the go-to option for those planning to hold a wedding. These are the types of loans to help you get instant cash loan in 1 hour to cover wedding-related expenses. The loan can help cover any expense involved from flowers and cakes to honeymoons or venue hire fees.

Depending on where you get the funds, a wedding loan can be a great idea or a last resort for your big day. If you’re considering this route, here are some key points to consider:

1. A Quick Way of Getting Money

Availing of a personal loan is now easier than ever, especially if your credit history is good and you have a steady income. Even when your credit history isn’t very good, you may still be able to secure the loan. However, it will likely come at a higher interest rate than those approved with good credit.

Credit-monitoring apps and accounts are a great way to stay informed of pre-approved offers or loans you would be eligible for based on your account information. Additionally, banks can provide numerous loan options accessible to you.

You may be eligible to obtain a secured personal loan with a Certificate of Deposit, savings account, or property such as a home in your possession. A secured personal loan allows you to access additional funds without taking money out of your savings or putting your house up for sale. These loans typically have lower interest rates as the risk is comparatively low.

2. The Impact on Your Credit Score

When lenders review your loan application, they always evaluate your credit score. This process may require a hard credit inquiry, which can hurt your rating. Consequently, it is critical to be cautious when applying for loans. Too many hard credit checks in a short time will be a red flag to the lender.

3. Have a Repayment Plan

Unless you have a very good plan to pay off your loan, do not take out one. Otherwise, the possibility of borrowing too much and getting overwhelmed by monthly payments is high. Devise a repayment plan that fits your budget and allows you to make payments comfortably without pressure.

Identify some areas in the monthly budget and cut them off. You can eliminate the subscriptions, find ways to improve your income or reduce the times you have your meals out. You may also consider spending more hours at your job or starting a side hustle to earn money during weekends and evenings.

4. The Loan May Come with Additional Fees

It’s important to remember that personal loans may come with additional fees. Even though the most common fee is origination charges, ensure you look out for prepayment penalties and fees.

If you repay your loan before the term ends, the lender won’t get all the expected interest. When this happens, the lender could levy a penalty based on your principal repayment or remaining interest to recover their losses.

5. You are Starting a Marriage in Debt!

When you factor in the debt that both of you have, along with a wedding loan, it can be very difficult to make ends meet as a married couple. This could lead to immense tension and resentment between spouses, which is certainly not healthy for any marriage. To prevent such troubles from affecting your future together, think twice before taking out yet another hefty loan for your big day.

Though a personal loan for wedding can be an excellent way to make your special day memorable, remember you will have another debt on top of your credit card bills. Besides, you should be a responsible borrower and repay it on time. We have highlighted the above key points to assist in making an informed decision about a wedding loan.