Top Financial Instruments You Can Trade with
In terms of trading, financial instruments that traders may employ are of various types, and they depend on their risk-taking capacity, trading strategy, and market outlook.
Intending to start your trading journey with more potential to gain returns and rewards, but are uncertain about which financial instruments will best suit you? No need to go elsewhere.
In this informative article, we’ll uncover the eight best financial instruments that you may trade with. Let’s break them down to make a mindful choice…
1. Stocks
Stocks are holdings in a company whose values fluctuate based on the performance. Stocks are traded in the stock exchange market. An individual stock is commonly referred to as a share, and purchasing a share makes the investor a shareholder in the company.
2. Exchange-Traded Funds (ETFs)
An exchange-traded fund (ETF) is a collection of assets that are listed in the stock market. ETFs track the composite value of the securities they are holding. They can be of various types, including metal ETFs, technology stock ETFs, and others.
3. Metals
Metals such as gold, silver, and copper are not only used as an asset in futures contracts, but also as a means of trading. Physical metals are readily traded—the precious metals such as gold and silver in particular. Gold investment (การ ลงทุน ทองคำ) is a popular choice among traders and investors looking to hedge against inflation or economic uncertainty.
4. Futures Contracts
Futures contracts are standardized contracts (i.e., quantity, price, and delivery location are predetermined) that represent a legal agreement to purchase a specific asset at a specified price in the future. Futures contracts are most often applied to commodities, including soybeans, cocoa, crude oil, and others.
5. Forward Contracts
These forward contracts differ from futures contracts, as they are customizable, unlike futures contracts, which are standardized. They are frequently used to hedge and diminish the risk of financial losses.
6. Options
Options contracts offer the buyer the right to purchase or sell an asset on an agreed date and price. Call options give the option of buying, and put options give the option of selling. As compared to a futures contract, an options contract does not force the buyer to purchase or sell.
7. Currency Derivatives
Currency derivatives are futures, forwards, and options contracts traded in a specific currency. Forex traders who execute trades based on currency movements commonly use them to achieve higher rewards and profitability.
8. Contract For Differences (CFDs)
A contract for difference (CFD) is a contract between two parties to trade financial instruments according to the difference between the entry price and the closing price. If you intend to embark on CFD trading, conduct thorough research, stay informed about market trends, and seek professional guidance to get started.
Final Verdict
Such financial instruments are widespread, but no financial instrument can benefit traders and investors without proper knowledge of its ins and outs. One of the surest ways to enter the financial markets is to pick an instrument that has the highest potential to give back.