Trading Returns Related

[amitmishra9461]

If world’s top investment banks, hedge funds are generating 15-20% average annual return, then

1. why anyone wants trading in derivatives, as he can buy stocks as well for that type of returns.
2. I am not understanding that why even world’s top investment banks, hedge funds are trading in derivatives.
3. Even reports and data is showing that top DII, FPI, FII or Investment banks are not able to beat index returns like Nifty 50, S&P 500 in a long term even after using such complex strategy in option selling, buying or futures. Then why are they trading in F&O segment?

[Jayadratha]

@amitmishra9461

Even reports and data is showing that top DII, FPI, FII or Investment banks are not able to beat index returns like Nifty 50, S&P 500 in a long term even after using such complex strategy in option selling, buying or futures. Then why are they trading in F&O segment?

The reports and data only reflect the profits from one aspect of the trade, specifically the gains from option or future position. They do not account for the profits generated from holding the underlying asset over the long term.

[tekichan]

To hedge positions in stock or futures