If you are in a business where your capital needs to work for you, you may want to explore the world of money market derivatives. If so, you will want to take some precautions to avoid specific disadvantages of money market derivatives and prepare for successful diversified investment.

For making the most of money market derivatives trading, use handy Internet resources to inform yourself and get the help you need to ensure your investing "ship of state" has a competent helmsman or crew. Business leaders looking to diversify should seek:

1. Detailed online resources for getting familiar with the "underlyers" or securities markets and extended options such as futures, forward rates, interest rate swaps and more.

2. Brokerages able to help you in placing money market derivatives and maintaining your portfolio.

3. Consultants who will give professional counsel on money market derivatives that you cannot do without.

Action Steps
The best contacts and resources to help you get it done

Find helpful online guides for money market derivatives and general trading

Online guides can help from everything from the most basic to the most advanced issues of advantages and disadvantages of derivatives and trading. Use these handy online readings to familiarize yourself with options, look at securities and how they work, or otherwise plan a portfolio.

I recommend: The APPL online guide to futures and options provides some insight on financial speculations that can open the way to successful derivatives trading in a diversified portfolio. Inside Futures provides a list of other resources for learning about Forex, futures, derivatives and much more.

Find money market derivatives brokerages

Only some brokerage firms are really poised to help out your company with money market derivatives moves: find those online and start up a fruitful synergy between your goals and their expertise.

I recommend: Chicago Trading Company will handle derivatives, check out brokerage options online. For another money market derivatives brokerage option, try Odom & Frey.

Find money market derivatives consulting

Another way to make the most out of your intention for capitalizing on capital is with skilled money market derivatives consulting that will show you the best possible courses and illuminate the disadvantages of derivatives. Check out online options to see if you can get hooked up with an outsider who will steer your investments well for the long haul.

I recommend: Get consulting options on money market derivatives, an interest rate swap, or other options from Heinz Riehl, affiliated with New York University. Riehl's impressive past is chronicled on the website. Financial Chaos Theory also offers derivatives markets consulting options for businesses from a detailed online venue.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Learn a lot about the specifics of money market derivatives before setting out to conquer the market. There are particular disadvantages of money markets and derivatives that are specific to this kind of investment, and nothing is certain when trading securities is concerned.

A well-known term in the investment community for money market derivatives is Forex. Forex enables you to trade a currency for another. You’ll definitely want to become educated in this arena. After all, this is where the big players, such as the global central banks, hedge funds, international corporations, and speculators, trade derivatives. You must know what you’re doing in order to be a successful money market derivatives trader.

One thing to keep in mind about money market derivatives is that they don’t have intrinsic value. Instead, their values change based on changes in factors, including political and economic policies. Here are things you should do before you decide to trade in the derivatives markets:

1. Know the money market derivatives market.

2. Open an account with a money markets derivatives brokerage firm.

3. Use a money market derivatives trading software platform to develop trading strategies.

Action Steps
The best contacts and resources to help you get it done

Know the money market derivatives market

Become familiar with the derivatives that make up the money markets derivatives or Forex market. You'll need to understand forward rates, interest rate swaps, and swap rates as well as the advantages and disadvantages of derivatives. Unlike the stock markets, there is no exchange for money market derivatives, so you can't go to an exchange and get information on derivatives markets.

I recommend: National Futures Association is the first place you’ll want to look. NFA is a regulatory body that authorizes Forex dealers. It also has a Forex online learning program. FX Solutions also has an educational section on derivatives where you can discover disadvantages of money market derivatives.

Open an account with a money markets derivatives brokerage firm

After you've become familiar with the money market derivative market, open an account with a broker. The Forex or money market derivative is virtually open 24 hours a day, except on weekends. Using a good brokerage firm can be a valuable educational resource in that it can explain how derivatives like swap rates or forward rates work. The broker can show you the disadvantages of derivatives.

I recommend: Forex.com Gain Capital Group doesn’t charge commissions for trading money market derivatives. If you have questions, Forex.com has licensed representatives that you can contact 24 hours a day. FXCM Foreign Capital Markets offers 24-hour online currency trading service. It has been in business since 1999, and has more than $100 million in capital.

Use a money market derivatives trading software platform

As with other investments, it's good to have a trading system when you trade in money market derivatives. Charts can show you the advantages and disadvantages of derivatives trading. In addition to using a charting tool, you'll need to be a good money manager. Having a trading software platform will help you manage your money.

I recommend: CitiFX Pro not only offers 24-hour online trading, but you can use its trading platform to develop your trading systems and also to manage your money. You’ll also want to look at MetaQuotes Software; more than 100 brokerage companies and banks rely on MetaQuotes Software for their trading platform.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Employ the 80/20 rule when trading derivatives. It can help you make money.

Are you interested in investing in money market derivatives? What this entails is using "derivatives" to "hedge" your underlying bets on certain securities. A money market account is based on speculating on securities, so the derivatives field as an appendage of that market is a little different. There are a lot of details about how money market derivatives get recorded and used, as well as about advantages and disadvantages of derivatives.

So what if you are a business leader who wants to get staff trained in handling money market derivatives, including spotting disadvantages of derivatives? You'll want to treat these top workers to a survey of financial educational options to make sure they can effectively administrate a portfolio, including money market derivatives. Those looking to provide education may look for:

1. On-site training for financial handling, including hedging, derivatives and advances speculation or forward rates.

2. Seminars and workshops on aspects of money market derivatives and capital management, including advantages and disadvantages of money market derivatives.

3. Resources for self-teaching on the handling of money market derivatives and other financial strategies.

Action Steps
The best contacts and resources to help you get it done

Find ongoing training options for money market derivatives

If you're looking for 'course work' for savvy staff, look for ongoing courses and trainings from institutions skilled in helping business handle their investments, including both the advantages and disadvantages of money markets and the optimal use of the derivatives markets that are built upon them.

I recommend: Investment Training and Consulting can offer your business some ongoing help with investment training, including how to hedge and bet, risk management and more for handling derivatives. Find more at the American Academy of Financial Management.

Look for seminars and workshops for money market derivatives

For more money market derivatives options, check out venues that offer one time training for these kinds of delicate financial administration strategies.

I recommend: New York-based EuroMoney Training offers courses on handling derivatives, distressed assets, and other investment knowledge. Get more seminars and training programs several times a year throughout the U.S. for the financial community at large at Treasury Resources Consulting & Investigating.

Find self-teaching guides for money market derivatives

For more on helping staff acquire their own money market derivatives knowledge, find guides and manuals available online for getting your crew competent in dealing with a volatile market.

I recommend: Find the "Student Solutions Manual" at Alibris for dealing with derivatives and futures. Get derivatives accounting training from Research and Markets.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When looking for solutions to train your staff in money market derivatives, remember that your results will only be as good as your game plan. It may help to assemble a 'task force' to see what capital can be reasonably invested, track promising underlying accounts for securities your company will pursue and look out for possible pitfalls in interest rate swaps or any other kind of risky hedging.

The money market is a very large market that deals in short-term debt securities. For example, the U.S. Government and banks issue certificates of deposit (CDs), which are both securities. Money market derivatives are securities in which the value is based on the interest rates on short-term debt instruments. Some people may be worried about increases in interest rates, while others may be worried about the opposite. Money market derivatives provide a method to manage interest rate risk.

Action Steps
The best contacts and resources to help you get it done

Options

Options are very popular derivative instruments. The buyer of the option must pay a premium to the seller of the option. That premium earns the buyer the right to purchase (or sell) some security, named in the option contract, from (to) the option seller at a predetermined price. Options are a valuable risk management tool, especially for holders of money market securities who are worried about a decrease in value in the short-term.

I recommend: InvestorWords.com provides a comprehensive description of the various types of options available.

Treasury bill

The U.S. Federal Government issues a Treasury bill that is short-term debt. Bills that typically have a maturity of 180 days or fewer sell at a discount. That means that the investor pays an amount less than the face value to buy the bill, and then receives the face value on the maturity date. This is a very common type of security, and many derivatives use this as the underlying asset.

I recommend: TreasuryDirect, a website maintained by the U.S. Treasury, features an excellent discussion of Treasury bills.

Futures

Futures are very common derivative securities. A futures contract is a contract in which one party (the buyer) promises to purchase something from another party (the seller) at some point in the future, for a price determined when the contract is written. Unlike an option, the buyer and seller are obligated to fulfill their part of the contract.

I recommend: Check out the U.S. Department of Agriculture for a great overview of futures contract basics.

Fed Funds

The Fed Funds rate is the interest rate charged to banks for money borrowed from the Federal Reserve System. This is a very important rate, as it provides the baseline for most other interest rates in the U.S. economy.

I recommend: The Federal Reserve Bank of New York explains the Fed Funds rate in easy-to-understand language.

LIBOR

LIBOR stands for London Interbank Offered Rate, and it is the interest rate banks from all over charge to each other for money lent for a very short period. This rate also forms the base rate for many other interest rates used in the world economy. Banks write derivative contracts based on the value of LIBOR because it is widely used and comes with a variety of maturities.

I recommend: Investopedia is the place to go when you are looking for an excellent, intuitive definition of LIBOR.

Exchange

Many money market derivatives trade on an exchange, even though many money market securities do not. An exchange is an organized entity that provides data about contracts and a trading platform or mechanism for buyers and sellers to efficiently conduct their transactions. The main exchanges in the U.S. for money market derivatives are the Chicago Board of Trade (CBOT), the Chicago Board Options Exchange (CBOE) and the CME Group.

I recommend: The Financial Dictionary through The Free Dictionary provides a complete definition of an exchange.