Stocks vs Options vs Futures vs Bonds¶
Simple definition from: https://www.quora.com/What-are-the-differences-between-stock-options-futures-bonds-ETFs-forex
Stock: A piece of ownership of a corporation. Owners of stock (called stockholders) are entitled to the company’s profits in the form of dividends, as well as voting rights for company management.
Options: A type of derivative that gives a buyer the choice to buy/sell a position by a certain date. The seller of the option gets a premium and keeps his/her position if the option expires worthless.
Futures: A type of derivative that fixes a set price for a buyer and a seller at a future date.
Bonds: A type of fixed-income investment which is debt for the issuer and an asset for the buyer. Payments (called coupons) are paid in regular intervals, and the principals is repaid when the bond reaches maturity.
ETF: Acronym for exchange-traded fund. Usually a group of assets, but sells very similarly to a single stock.
Forex: Short for foreign exchange. Trading currencies. Usually highly leveraged and risky.