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Introduction to Asset Types

Nov 2, 2023 |

Understanding the different types of assets is essential for successful trading and investing. Each asset type has its unique characteristics, risk profiles, and potential rewards. Here is an introduction to some common asset types:

What Is a Stock?

Nov 2, 2023 |

A stock, also referred to as a share or equity, represents ownership in a publicly traded company.

What Is an ETF?

Nov 2, 2023 |

ETFs, or exchange-traded funds, are investment funds that are traded on stock exchanges, similar to individual stocks.

What Is an OTC Stock?

Nov 2, 2023 |

An OTC stock, or over-the-counter stock, refers to a stock that is not listed on a centralized exchange such as the New York Stock Exchange (NYSE) or NASDAQ. Instead, OTC stocks are traded directly between parties through a decentralized network of broker-dealers and market makers.

What Is an Options Contract?

Nov 2, 2023 |

An options contract is a financial derivative that provides the buyer with the right, but not the obligation, to buy (via a call option) or sell (via a put option) an underlying asset at a predetermined price (the strike price) within a specific period (until the expiration date).

What Is a Futures Contract?

Nov 3, 2023 |

A futures contract is a legally binding agreement between two parties to buy or sell an underlying asset at a specified price and date in the future.

What Is Forex?

Nov 3, 2023 |

Forex, short for foreign exchange, is the global market where currencies are traded. Forex trading involves the simultaneous buying of one currency and selling of another currency, with the aim of profiting from changes in exchange rates. The forex market is the largest financial market in the world, exceeding $6 trillion in daily trading volume. It operates globally and is accessible 24 hours a day, 5 days a week. Transactions in the forex market occur through an extensive network of banks, financial institutions, corporations, and individual traders.

What Is Cryptocurrency?

Nov 3, 2023 |

Cryptocurrency refers to digital or virtual currencies that utilize cryptographic technology for securing transactions and controlling the creation of new units. Unlike traditional currencies issued by central banks, cryptocurrencies operate independently and are based on decentralized systems, such as blockchain technology.

What Are Bonds?

Nov 6, 2023 |

Bonds are a type of fixed-income investment that serve as debt instruments. They represent a loan made by an investor, known as the bondholder or lender, to a borrower, such as a corporation or government entity, commonly referred to as the issuer. When an investor purchases a bond, they are essentially lending money to the issuer for a fixed period of time, during which the issuer agrees to make regular interest payments, known as coupon payments, to the bondholder. At maturity, which is the end of the bond's term, the issuer repays the principal amount, known as the face value or par value, to the bondholder.

What Are Treasuries?

Nov 6, 2023 |

Treasuries, also known as US Treasuries, are debt securities issued by the US government to fund its operations and initiatives. These securities are issued by the US Department of the Treasury and are considered extremely safe investments due to the full backing of the US government's creditworthiness and reliability.

What Are Mutual Funds?

Nov 6, 2023 |

Mutual funds are investment vehicles that combine funds from multiple investors to create a diversified portfolio of assets. These assets can include stocks, bonds, and other securities. A professional fund manager oversees the mutual fund and makes investment decisions based on the fund's stated investment objectives. The pooled funds are used to purchase a range of assets that align with the fund's goals, offering investors exposure to a diversified portfolio without the need for individual asset selection and management.

What Are Warrants?

Nov 6, 2023 |

Warrants are financial instruments that give the holder the right to buy or sell an underlying asset, such as stocks, bonds, or commodities, at a predetermined price and within a specific time frame. They are typically issued by a company or a financial institution as a way to raise capital or enhance the marketability of other securities they offer.

Certificates of Deposit (CDs)

Nov 6, 2023 |

Certificates of Deposit (CDs) are financial instruments offered by banks and credit unions that provide a secure and predictable investment option with minimal risk. In this article, we will explore the intricacies of CDs, including their operational framework, various types, comparative analysis with other accounts and assets, as well as their associated advantages and disadvantages.