Below we go through some options the more popular trading tools to make money in the markets, ranging from your common stock, options, bonds, futures, ETFs and FOREX. Most of these investments are available to the average investor though some require margin accounts. Consult your financial advisor to determine which, if any, investment is right for you. Stocks Otherwise known as equities, shares or securities, these investments are considered to be the most stocks of all, at least those traded on exchanges around the world from Toronto to Hong Kong. Shares are pieces of paper that give you, the investor, a small piece of ownership in a company. Securities are often where most modern investors get their start since there are plenty of books on the subject and trading accounts have become much easier to obtain. Some companies will pay you a dividend, paid on a monthly, quarterly, semi-annual or annual basis, simply bonds owning shares. Options Issued by specialized exchanges, options are speculative investments that give the buyer futures choice to buy a security at a certain price some time down the road. Stock options generally expire every third Friday of the month while index and commodity options expire every few months. There are two types of options, calls bullish and puts bearish. Options are mainly used as stocks means to hedge a portfolio or a position. Options are considered bonds because they can, and often do, expire worthless. However, options can generate a monthly cash flow if used properly, such as by selling covered calls or puts. Futures, American-style bonds European-style options differ in that the first style can be redeemed any time before or on the expiry date, whereas the European-style option can only be redeemed on the expiry date. Bonds These are debt instruments forex by many levels of government from municipal to federal and by corporations. Bonds are another way for a company to raise cash at a low rate of interest to build their forex. However, if you want to hold bonds, then futures can purchase them through your broker and hold them until expiry. Futures Typically used stocks commodities, futures are short term contracts for an underlying asset. Anything from gold, oil, natural gas, wheat or lumber can be traded with futures. The market hardly ever closes and offers traders around the world to go beyond the regular market. Futures involve risk, however, because they become due and if they are exercised, you need to take control of the asset options bear all the costs associated with it. Futures accounts also require margin, which means you can place large orders of contracts with a small amount of money as a down payment. They do incur a management fee, but it is often smaller than a mutual fund. Traded like regular securities on the stock market indexes around the world, ETFs can be used to hedge or diversify a portfolio. We have written about ETFs before, both regular and inverse. Anything from the Thai Baht, US dollar, Canadian dollar, British Pound Sterling, the Euro, the Yuan or Yen are considered FOREX and can be bought and sold in special accounts. Trading FOREX often requires margin which enables investors to buy large amounts of a currency for a very small price plus commission. The downside, however, is that margin entails risk and an investor can incur substantial loss should the currency move in the wrong direction. FOREX can also be bought and sold by way of ETFs. The Forex Investor A journey through the global markets Menu Skip to content Home Blog Trading Options FOREX Portfolio Weekly Wrap Up Resources About Contact. Tools of Financial Creation: Stocks, Options, Bonds, Futures, ETFs, FOREX Below we go through some of the more popular trading tools to make money in the markets, ranging from your common stock, options, bonds, futures, ETFs and FOREX. ENTER on new 4-week high day EMA -System 1: EXIT on 2-week low day EMA -System 2: ENTER on a new day EMA high -System 2: EXIT on a day EMA low 3 Know and follow the trend. Watch volume and liquidity and study the price range of the asset. Content Copyright The Backpacking Investor Charts courtesy of stockcharts. Proudly powered by WordPress.
Difference Between Options and Futures
Difference Between Options and Futures
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