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Types of Assets Types of Assets

There are many different types of assets you can trade. They range from common equity, to futures contracts, to commodities, to bonds, and beyond. This category goes into detail about each of these different asset classes to help you understand why they exist, why traders use them, and how they are intended to be used, traded and invested.

  • Types of Assets

    Introduction to Asset Types 

    Asset types play a crucial role in trading as they define the financial instruments that traders buy and sell to make profits. In today’s financial markets, there are various types of assets available for trading, ranging from traditional stocks and bonds to more complex derivatives such as options and futures. Each asset type has its …
    Introduction to Asset Types
  • Types of Assets

    What Is a Stock? 

    A stock (also known as a share or equity) is a unit of ownership in a company. When you buy a stock, you become a shareholder and own a portion of the company. As a shareholder, you may be entitled to a portion of the company’s profits (known as dividends) and you may have the …
    What Is a Stock?
  • Types of Assets

    What Is an ETF? 

    ETFs, or exchange-traded funds, are investment funds that are designed to track the performance of a specific index or sector of the market. ETFs are made up of a basket of underlying securities, which can include stocks, bonds, or other assets. ETFs are created by financial institutions called “authorized participants” (APs), who purchase the underlying …
    What Is an ETF?
  • Types of Assets

    What Is an OTC Stock? 

    An OTC stock, also known as an over-the-counter stock, is a stock that is not listed on a major stock exchange, such as the New York Stock Exchange (NYSE) or the Nasdaq Stock Market. Instead, OTC stocks are traded through a decentralized network of broker-dealers and market makers who facilitate trades between buyers and sellers. …
    What Is an OTC Stock?
  • Types of Assets

    What Is an Options Contract? 

    An options contract is a financial instrument that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price, called the strike price, on or before a specified date, called the expiration date. How Do Options Contracts Work? To buy an options contract, the buyer pays …
    What Is an Options Contract?
  • Types of Assets

    What Is a Futures Contract? 

    A futures contract is a standardized agreement between two parties to buy or sell an underlying asset, such as a commodity, currency, or financial instrument, at a predetermined price and date in the future. How Do Futures Contracts Work? Futures contracts are standardized, meaning that they have a specified quantity and quality of the underlying …
    What Is a Futures Contract?
  • Types of Assets

    What Is Forex? 

    Forex is short for foreign exchange, and it refers to the global market for trading currencies. Forex trading involves buying one currency while simultaneously selling another currency, with the goal of profiting from the difference in exchange rates between the two currencies. The forex market is the largest financial market in the world, with an …
    What Is Forex?
  • Types of Assets

    What Is Cryptocurrency? 

    Cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactions and to control the creation of new units. Unlike traditional currencies, which are issued by central banks, cryptocurrencies operate independently of central authorities and are decentralized. How Does Cryptocurrency Work? Cryptocurrencies are stored on the blockchain, which is a decentralized, …
    What Is Cryptocurrency?
  • Types of Assets

    What Are Bonds? 

    Bonds are a type of fixed-income investment that represent a loan made by an investor to a borrower, usually a corporation or government entity. How Do Bonds Work? When an investor buys a bond, they are effectively lending money to the issuer of the bond, which is typically a corporation or government entity. In return …
    What Are Bonds?
  • Types of Assets

    What Are Treasuries? 

    Treasuries, or US Treasuries, refer to debt securities issued by the US government to finance its operations and programs. The securities are issued by the US Department of the Treasury and are considered to be one of the safest investments available in the financial markets, as they are backed by the full faith and credit …
    What Are Treasuries?
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