What is VIOP and How to Trade Futures?

VIOP (Futures and Options Market) is a derivative market operating under Borsa Istanbul that offers the opportunity to trade with leverage. In VIOP, unlike the spot market, the stock itself is not traded, but 'futures contracts' written based on that stock, index, or commodity are bought and sold. By depositing a specific collateral, investors commit to buying or selling an asset at a future date at a price determined today. VIOP is an area requiring professional knowledge, offering high profit opportunities while carrying serious risks.

One of the most important features of VIOP is the leverage system. Leverage allows you to open positions multiple times the size of the collateral you deposit. For example, in a contract with a 1:5 leverage ratio, you can open a stock position worth 50,000 TL by depositing 10,000 TL of collateral. While this multiplies your profit when the price moves in direction of your expectation, it also increases your loss in the same ratio when the price moves in the opposite direction, leading to losing all of your collateral (margin call). Therefore, the leverage ratio must be managed very carefully in VIOP transactions.

One of the biggest benefits offered by VIOP to investors is the opportunity of two-way trading (short selling). While you can only make money when prices rise in the spot market, you can open a 'Sell' (Short) position in VIOP by predicting that prices will fall, and achieve profits as the market declines. This feature is a great tool to protect the portfolio or gain profits from the decline, especially during periods when the market enters a downtrend. In addition, VIOP contracts are heavily used by institutional investors to hedge the risk of their stock portfolios in the spot market.

When trading in VIOP, attention should be paid to contract expiry dates and collateral management. Each contract has a specific expiry date (usually every two months) and positions are automatically closed with cash settlement or rolled over to the next maturity at the end of the term. End-of-day profit/loss calculations (mark-to-market) are performed at the end of the session every day, and if you lose, you are asked to add cash to the account so that your collateral does not fall below the initial level. If cash is not added, your positions are automatically closed by the broker.

In our Sermaye Borsasi Telegram group, we analyze the general direction of contracts in the VIOP markets, open interest numbers, and the long/short distributions of institutional players daily. VIOP can turn into a dangerous playground for investors with little market experience. Therefore, before trading in VIOP, training must be obtained and it should be started with small collaterals. As Sermaye Borsasi, we strongly advise our investors to complete our financial literacy training before leveraged transactions.