The financial markets can be broadly defined, however, as an active trader and investor we look at four core tradable instruments
- Stock Market: We can buy and sell stock in this market. We buy a stock for a few reasons, 1) growth 2) dividend 3) cash flow. We sell stock to make money as the stock goes down in price.
- Options Markets: This market is traded in contracts. While there are two types of options, calls and puts, each are traded in contracts. Each contract controls 100 shares of stock.
- Futures Market: Commonly referred to as the commodity market. However, you can also trade market indexes, currencies as well as your commodities. It is also a 24 hour market
- Forex Market: The largest of the markets by a mile but dominated by your major currencies such as the USD, EUR, JPY, GBP, CHF, CAD, & AUD. Similar to the futures market, it is a 24 hour market.