Financial Trading Instruments

Last Updated on January 2, 2023

Mutual Funds:
A mutual fund is an investment company that takes money from many investors and pools it together in one large pot. The professional manager for the fund invests the money in different types of assets including stocks, bonds, commodities, and even real estate

Commodities:
Basic goods that can be transformed into other goods and services. They tend to protect investors against the effects of inflation. Commodities tend to be much more volatile than other kinds of investments,

Securities

Currency: A standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins.

Stocks: financial security granting rights of ownership in a corporation, such as a claim to a portion of the assets and earnings of the corporation and the right to vote for the board of directors. Stock is issued and traded in units called shares.

Bonds: A bond is a type of security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time.

Options: An option is a contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option. 

Futures: A futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument.