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If you want to survive in the complex financial market
We need an investment strategy that utilizes derivatives!

"The Master's Investment Method: Mastering Derivatives" is the first book by derivatives and ETF expert Director Chang-gyu Choi, and was written with the belief that "derivatives are dangerous not because they are dangerous, but because we don't know about them."
The author, who has been selected as the "Best Analyst" in the derivatives sector for 10 consecutive years, explains futures, options, and derivative funds, which have been unfamiliar and difficult for ordinary investors, in a friendly manner by connecting them with practical strategies.
This book covers everything from how to use foreign gifts to covered call option strategies and the derivative fund structure that forms the basis of ETFs.
It will serve as a reliable compass for all investors who wish to read the "invisible trends" in complex financial markets.

Compared to the KOSPI 200 futures market, foreign investors accounted for 27% (based on trading value) of the KOSPI market in 2024. Foreign investor trading in the KOSPI 200 index futures market is 2.5 times greater than in the KOSPI market.
The stock market already tends to move according to the stock trading trends of foreign investors, and in the KOSPI 200 index futures market, foreign investors control two-thirds of the volume.
Therefore, some argue that by observing foreign investors' index futures trading, one can get hints about the direction of the Korean stock market.
---From "Why do foreigners invest in Korean futures?"

In 1997, less than a year after the KOSPI 200 index futures market opened, rumors began to circulate in the securities industry that a big player from Mokpo was emerging and dominating the futures market.
It is said that a certain deputy manager of a certain securities company is manipulating futures prices by controlling up to a quarter of the futures market trading volume.
'Mokpo Three-legged Octopus' is a nickname given to the city because at the time, the big shot's workplace was the Mokpo branch of a securities company and Mokpo was famous for its three-legged octopus.
Mokpo Sebal Nakji's market dominance was so powerful that some even circulated that it exceeded the combined futures contracts of several securities firms at the time. Since the KOSPI 200 futures market had been open for less than a year, few investors had a grasp of futures products, and even foreign investors were restricted to very limited amounts of investment in the domestic futures market.
Since there were not many institutional investors and foreign investors were also tied up, individual investors took up the majority of the trading, and among them, Mokpo Sebal Octopus recorded an overwhelming majority of trading.
---From "The King Ants of the Derivatives Market Exist"

In 2024, foreign investors traded a combined 233 trillion won in Samsung Electronics common stock, both buys and sells, and a combined 234 trillion won in Samsung Electronics stock futures.
Foreign investors traded stock futures as much as common stocks.
While we were only looking at the Samsung Electronics stock spot order book, foreign investors were open and weighing both the stock spot and stock futures order books, and we can see that they were employing various trading strategies using stock futures.
---From "Samsung Electronics stock price moves with Samsung Electronics futures"

Covered calls immediately capture the option premium by selling a call option on the underlying asset, and provide stable cash flow when combined with dividend income from the underlying asset.
This is particularly advantageous for retirees and income investors, as they forgo additional upside unless the stock price surges, but can offset some of the downside risk with a premium.
The advantage of the covered call strategy is that it combines dividend income and option premiums to generate profits in various scenarios based on stock price fluctuations.
---From "Understanding Covered Call Underlying Assets and Options (Calls and Puts)"

Another important use of derivatives is hedging, a strategy for risk reduction.
This is a defensive transaction aimed at minimizing potential losses from assets already held, as opposed to speculative transactions aimed at maximizing profits.
The most representative example is the case of investors who hold stocks for a long period of time.
Even if you want to maintain your holdings in the long term, considering the company's growth potential and dividends, you may be concerned about the possibility of a market decline in the short term.
In this case, by taking a short position in the stock futures contract for that stock, you can partially offset the loss in spot valuation due to the stock price decline with the profit generated from the futures contract.
---From "Index funds hide various derivatives transactions"

Long-short strategies can be implemented in a variety of ways.
Strategic combinations are possible, such as long-short positions based on the relative value of individual stocks, long-short positions across industries or sectors, long-short positions between large- and small-cap stocks, or long-short positions between index futures and individual stocks.
The key is that the return on a long position should be higher than that of a short position, and the higher the correlation between the two positions, the more effectively risk can be reduced.
A long-short strategy with a complementary structure like this can contribute to more stable profit generation.

---From "Practical Use of Derivatives"