Financial Instruments at a glance

"Financial instruments" refers to tradable assets that represent a legal agreement or contract between parties. These instruments can be used for various purposes, such as investment, hedging, or speculation. There are many different types of financial instruments, including:

1. Stocks: Shares of ownership in a company that are traded on a stock exchange.

2. Bonds: Debt securities issued by governments or corporations that pay interest to investors.

3. Options: Contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time.

4. Futures: Contracts that obligate parties to buy or sell an underlying asset at a predetermined price and time in the future.

5. Exchange-traded funds (ETFs): Investment funds that are traded on stock exchanges and hold a basket of securities.

6. Mutual funds: Investment funds that pool money from many investors to purchase a diversified portfolio of securities.

7. Derivatives: Financial instruments that derive their value from an underlying asset or reference rate.

8. Foreign exchange (FX) instruments: Financial instruments used to trade currencies, such as spot and forward contracts.

9. Commodities: Physical goods, such as oil, gold, and wheat, that are traded on exchanges.

10. Real estate investment trusts (REITs): Investment vehicles that hold and manage real estate assets, such as office buildings or apartment complexes, and pay out a portion of the income generated to investors.