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“Everyone ross here from warrior training. I want to talk with you for a moment moment about a few of the investment vehicles that are popular among active traders as may already know i am. An active trader and i focus on trading stocks. So the first one we ll talk about is stocks.
When you buy and sell stocks you re buying and selling shares of publicly traded companies and so the risk. There is that you have what s called single stock exposure god forbid something happens to one of those stocks what are one of those companies. While you re in the trade and all of the capital that you ve got in it is potentially at risk. One of the ways that some people will try to diversify that risk is by trading order called etfs exchange traded funds these funds in contrast to a single stock are made up of a group of stocks and sometimes they re made up of hundreds of stocks or sometimes they re made up of stocks that are all within the same the same sector or the same commodity for instance there s gold etfs exchange traded funds.
There s natural gas etfs you can find biotech etfs and you can of course find an etf for the entire s p. 500. So these are a way that traders can actively trade and profit from volatility in the market. While avoiding that single stock exposure.
Now in addition to stocks and etfs. You have options options are probably the most complicated to describe in a short video. But you can trade options on both stocks and etfs and options are what are called derivatives. So an option is something that you purchase you re purchasing the option or contract to buy or sell.
Stocks or etfs at a set price anytime before a set expiration date and of course there s value in that contract and as the underlying asset of the stock with etf go up or down. So do the value of the option contracts that you ve purchased so some traders will purchase option contracts because within that. Contract you may purchase the right to buy let s. Say 10000.
Shares of a stock or an eta at a. Cost that s much much lower than actually just going ahead and buying 10000. Shares of that stock or etf. So you have leverage which means you can use a smaller amount of money to potentially control a larger amount of shares the downside risk.
There is that because you re purchasing an option contract at the end when it expires. It can be potentially worth zero. It can be worth nothing so they re not something that many people would actively purchase as an investment. But really is a more speculative type of trade now in addition to stocks etfs and options we have futures and we have forex the futures market allows you to buy and sell commodities so you are again buying contracts of commodities such as corn soybeans oil natural gas again and there is some overlap where you can sometimes purchase an etf or you could part which is traded on the market on the exchange or you could buy a futures commodity contract which is traded on the commodities exchange and then you have 4x which is trading exchange.
A foreign foreign currency. There are different currencies so you could trade the us dollar against the euro for instance or the pound against the euro and some traders like trading currency. It s actually one of the most popular markets in the world because of course from anywhere in the world you can actively trade currencies and they can be quite volatile depending on the pairs that you re trading. But remember you re always having to trade a pair you re trading.
The us dollar against something else and that change and then i suppose the last financial instrument. That is maybe not as popular right now. But certainly was in previous years over cryptocurrencies and again this is trading kind of like foreign exchange. It s trading currencies at the us dollar against bitcoin or something like that a lot of volatility there that brought in a lot of popularity.
But at this point. They re sort of losing popularity as the value of those currencies has have decreased so when we look at financial investment vehicles what we look at our stocks etfs options futures forex and maybe a little bit of cryptocurrency and so those are six financial investment vehicles that you have your disposal and for each one of those investment vehicles there are hundreds of different trading strategies for how to be a profitable trader trading them so really i hope you find your way in the market with whichever investment vehicle you choose and as always any questions don t hesitate to reach out if you re still watching you must have really enjoyed that video so why not subscribe and get email alerts anytime i upload new content remember when you subscribe you become a member ” ..
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