Financial Instruments
Tradeable assets including currencies, stocks, bonds, commodities, options, and derivatives.
Financial instruments are tradeable contracts, from cash assets like stocks and currencies to derivatives like options, futures and CFDs. Each has its own risk, margin and hours.
Financial instruments are tradeable contracts representing monetary value. They include cash instruments like stocks, bonds, and currencies, as well as derivative instruments like options, futures, and CFDs. Each instrument has its own characteristics, risks, margin requirements, and trading hours. Choosing the right instrument for your strategy is fundamental to trading success.
How It Works
- Cash instruments (stocks, forex, bonds) derive value from supply/demand or the issuing entity
- Derivative instruments (options, futures, CFDs) derive value from an underlying asset
- Each instrument trades on specific exchanges or OTC markets with their own hours and rules
- Brokers offer different instrument selections with varying spreads, swaps, and margin requirements
Trading Tips
Start with one or two instruments and learn their behaviour before branching out
Check spread, swap rate, and margin requirement for each instrument at your broker
Match the instrument to your strategy. Scalpers need tight spreads; swing traders may prefer trending commodities.
Related Terms
Put Your Knowledge Into Practice
Compare regulated brokers and find the best one for your trading style.