Online trading has been rapidly growing in popularity in the recent years, mostly due to the advantages it offers. One of these advantages is the wide range of underlying assets traders can choose from. The assets available to invest in when trading Stocks and shares. As the key to successful trades and optimal results is to make informed decisions, it is important to get familiar with the different types of assets.
♦ Stocks are shares that companies issue in order to raise capital, for example Apple, Google, Microsoft stocks. A stock represents a share in the company and by buying a stock you can buy a part of the company or sell it when its value hopefully increases. With that type of online trading you can invest by predicting the movements in the price of a stock, which removes some of the risk associated with this type of trading.
♦ Commodities are real physical goods like oil, gold, silver, wheat, and their price is influenced by various political and environmental factors, which enables traders to follow closely the fluctuations and invest in predictions about commodities’ price movements.
♦ Indices are groups of assets, combined to represent a certain market, for example the biggest companies of a country or a group of companies from the same industry like technologies or mining. Such an index is Dow Jones, which represents the performance of 30 large, publicly owned US companies.
♦ Currencies are traded in pairs on the market, which is short for Foreign Exchange. As the values of currencies vary against each other based on exchange rates and on the economic performance of a country or a group of countries, their fluctuations can generally be predicted. Some of the major currency pairs are USD/EUR, EUR/GBP, USD/JPY.
|C A C 40||USD/JPY||Corn|
|C A C Future||USD/CHF||Sugar|
|D A X||NZD/USD||Copper|
|D A X Future||GBP/USD||Platinum|
|FTSE IT All-Share||EUR/GBP||Wheat|
|M D A X|
|Nasdaq 100 Fut|
|Tel Aviv 25|
|Bank of America|
|E D F|
The list provided does not contain all possible assets but was created for the purpose of getting to know the most common trading assets available in the market. Some stock brokers might focus on smaller list but others would boast that they offer all. When selecting a broker it is recommended to check if it offers the assets you are planning to trade with.
Learning about each of the above assets classes, you will gain an overview of the specifics to count on during your daily trading – e.g. particular stocks will influence indexes that include them, the speed of update in price for commodities will depend on the production cycle or geopolitical situation etc.