{"id":1106,"date":"2024-01-24T05:10:51","date_gmt":"2024-01-24T05:10:51","guid":{"rendered":"https:\/\/tradeafricahub.com\/?page_id=1106"},"modified":"2024-01-24T05:13:23","modified_gmt":"2024-01-24T05:13:23","slug":"instruments-traded-in-the-financial-markets","status":"publish","type":"page","link":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/","title":{"rendered":"Instruments traded in the Financial Markets"},"content":{"rendered":"\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>In this lesson, we will take a look at instruments traded in financial markets and institutions. These are namely stocks, currency pairs, stock indices, commodities, and cryptocurrencies. What are their specifications and what should you know about them? Let\u2019s find out!<\/p>\n\n\n\n<p>Table of Contents<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Stocks\n<ul class=\"wp-block-list\">\n<li>Why are stocks traded?<\/li>\n\n\n\n<li>Types of stocks<\/li>\n\n\n\n<li>How to trade stocks<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Currency pairs<\/li>\n\n\n\n<li>Stock indices<\/li>\n\n\n\n<li>Commodities<\/li>\n\n\n\n<li>Cryptocurrencies<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Stocks<\/h2>\n\n\n\n<p>A stock is a security that the owner becomes a shareholder of the company. A shareholder has different rights. E.g. he\/she is entitled to participate in the profit of the company in the form of dividends but also to participate in the management of the company, inter alia, by being entitled to vote at the general meeting or to participate in the liquidation balance of the company in the event of a liquidation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why are stocks traded?<\/h3>\n\n\n\n<p>Firstly, there is an incentive for companies to raise capital by selling shares on the stock exchange. Investor motivation is to evaluate their resources. The company\u2019s liabilities are guaranteed by shareholders only by their stake, which is the share price multiplied by the quantity purchased.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Types of stocks<\/h3>\n\n\n\n<p>We distinguish stocks in terms of form on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Paper shares&nbsp;<\/strong>\u2013 physical documents<\/li>\n\n\n\n<li><strong>Dematerialized shares&nbsp;<\/strong>&nbsp;\u2013 shares entered into electronic records<\/li>\n<\/ul>\n\n\n\n<p>Then the shares in the name of the&nbsp;<strong>natural or legal person<\/strong>, or shares&nbsp;<strong>of the owner\/bearer<\/strong>, are anonymous and no longer used today.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How to trade stocks<\/h3>\n\n\n\n<p>Stocks can be traded on stock exchanges but also through CFDs.The stocks are traded entirely online. Examples of significant shares: Microsoft, Apple, etc. For certain shares, we use the term&nbsp;<strong>blue chip<\/strong>. These are the shares of the largest and most profitable companies, being traded on the stock market exchange, having stable growth, and paying dividends on a regular basis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Currency pairs<\/h2>\n\n\n\n<p>Currency pairs are traded on the foreign exchange (also known as Forex), which is the biggest market with a&nbsp;<strong>\u201c$7.5 trillion\u201d<\/strong>&nbsp;daily volume (In 2022. Source: bis.org). A currency pair consists of two currencies, where one currency is called the base currency and the other is the quote currency.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg?ssl=1\" alt=\"\" class=\"wp-image-198\"\/><\/figure>\n\n\n\n<p>We trade currencies in such a way that we speculate on the strengthening of one currency against the other currency. We can explain the relationship of currencies to the EURUSD currency pair, which is the most popular and most frequently traded pair. In this case, the base currency is the euro and the quote currency is the US dollar.<\/p>\n\n\n\n<p><strong>What does the EURUSD rate at the 1.12 level mean?<\/strong><\/p>\n\n\n\n<p>This indicates that 1.12 USD is required to buy 1 euro. The rate is always the unit of the base currency.<\/p>\n\n\n\n<p>Currency pairs are divided into 3 categories \u2013&nbsp;<strong>majors, minors (or crosses), and exotics.<\/strong><br>Other examples of currency pairs: USDJPY, AUDUSD, EURCHF.<\/p>\n\n\n\n<p>Currency pairs are characterized by high liquidity and often volatility too, depending on the fundamentals. Price usually moves up to 1-2% daily.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Stock indices<\/h2>\n\n\n\n<p>The stock index is the sum of many different instruments traded on one exchange. The stock index is an indicator of the development of a given segment or economy of the country as a whole. Most often, we have stock indices that reflect the value of shares traded on a given stock exchange. For example, the most famous stock index of the Frankfurt Stock Exchange \u2013 DAX, is composed of a share price by 40 most important selected German companies.&nbsp;<strong>(BMW, Adidas, BASF, Bayer, Lufthansa, Siemens).<\/strong><\/p>\n\n\n\n<p>Examples of stock indices:&nbsp;<strong>Dow Jones Industrial Average, S&amp;P 500, FTSE 100.<\/strong><\/p>\n\n\n\n<p>The value of stock indices varies based on the movement of all shares that are contained in the index.<\/p>\n\n\n\n<p>In general, indices are a stable investment instrument. As a rule, they are not volatile just as any individual stock titles can be. Therefore, investment in indices is gaining increasing popularity among investors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Commodities<\/h2>\n\n\n\n<p>We can describe commodities as goods traded in markets without quality differences. Deliveries from different suppliers are mutually substitutable. For example, a commodity cannot be a car that is produced by many different means and at different prices. The most well-known traded commodities are&nbsp;<strong>crude oil, gold, and natural gas,&nbsp;<\/strong>but also<strong>&nbsp;coffee, corn, orange juice&nbsp;<\/strong>etc.<\/p>\n\n\n\n<p>There are two types of traders on the market \u2013 the first (also being a minority) only speculates on price development, while others are really buying that particular commodity.<\/p>\n\n\n\n<p>For example, Starbucks secures its coffee supply a year in advance through the exchange.<\/p>\n\n\n\n<p>For commodities, we need to take greater risks \u2013 their price depends on climate change, global resource outages, trade wars, etc. It is important to understand that some commodities are correlated to the certain currency of a particular economy. Correlation of price developments between currency pairs and commodities:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Crude oil<\/strong>&nbsp;\u2013 Canada<\/li>\n\n\n\n<li><strong>Gold, iron ore<\/strong>&nbsp;\u2013 Australia<\/li>\n\n\n\n<li><strong>Dairy products<\/strong>&nbsp;\u2013 New Zealand<\/li>\n\n\n\n<li><strong>Natural gas<\/strong>&nbsp;\u2013 Qatar<\/li>\n<\/ul>\n\n\n\n<p>There is also a need to monitor world affairs, macroeconomic data, population growth demands, etc.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Cryptocurrencies<\/h2>\n\n\n\n<p>Cryptocurrencies are a type of digital currency or, in other words, electronic money. The biggest problem or for someone else, the advantage is that electronic money is not regulated. The most famous is Bitcoin; others are Dash, EOS, Ethereum, Ripple, Litecoin, etc. The price changes of cryptos are very steep \u2013 e.g. Bitcoin in 2021 ranged from $29,000 to $64,000.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this lesson, we will take a look at instruments traded in financial markets and institutions. These are namely stocks, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"class_list":["post-1106","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Instruments traded in the Financial Markets - TAH<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Instruments traded in the Financial Markets - TAH\" \/>\n<meta property=\"og:description\" content=\"In this lesson, we will take a look at instruments traded in financial markets and institutions. These are namely stocks, [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/\" \/>\n<meta property=\"og:site_name\" content=\"TAH\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-24T05:13:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/\",\"url\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/\",\"name\":\"Instruments traded in the Financial Markets - TAH\",\"isPartOf\":{\"@id\":\"https:\/\/tradeafricahub.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg\",\"datePublished\":\"2024-01-24T05:10:51+00:00\",\"dateModified\":\"2024-01-24T05:13:23+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage\",\"url\":\"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg\",\"contentUrl\":\"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/tradeafricahub.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Instruments traded in the Financial Markets\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/tradeafricahub.com\/#website\",\"url\":\"https:\/\/tradeafricahub.com\/\",\"name\":\"Trade Africa Hub\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/tradeafricahub.com\/#organization\"},\"alternateName\":\"T.A.H\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/tradeafricahub.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/tradeafricahub.com\/#organization\",\"name\":\"Trade Africa Hub\",\"url\":\"https:\/\/tradeafricahub.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/tradeafricahub.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/i0.wp.com\/tradeafricahub.com\/wp-content\/uploads\/2025\/05\/cropped-Texture-Watch-Instagram-Post-scaled-1.png?fit=2560%2C2360&ssl=1\",\"contentUrl\":\"https:\/\/i0.wp.com\/tradeafricahub.com\/wp-content\/uploads\/2025\/05\/cropped-Texture-Watch-Instagram-Post-scaled-1.png?fit=2560%2C2360&ssl=1\",\"width\":2560,\"height\":2360,\"caption\":\"Trade Africa Hub\"},\"image\":{\"@id\":\"https:\/\/tradeafricahub.com\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/instagram.com\/tradeafrica.co\",\"https:\/\/wa.me\/254701657815\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Instruments traded in the Financial Markets - TAH","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/","og_locale":"en_US","og_type":"article","og_title":"Instruments traded in the Financial Markets - TAH","og_description":"In this lesson, we will take a look at instruments traded in financial markets and institutions. These are namely stocks, [&hellip;]","og_url":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/","og_site_name":"TAH","article_modified_time":"2024-01-24T05:13:23+00:00","og_image":[{"url":"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg","type":"","width":"","height":""}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/","url":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/","name":"Instruments traded in the Financial Markets - TAH","isPartOf":{"@id":"https:\/\/tradeafricahub.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage"},"image":{"@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage"},"thumbnailUrl":"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg","datePublished":"2024-01-24T05:10:51+00:00","dateModified":"2024-01-24T05:13:23+00:00","breadcrumb":{"@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#primaryimage","url":"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg","contentUrl":"https:\/\/academy.ftmo.com\/wp-content\/uploads\/2023\/03\/c.jpg"},{"@type":"BreadcrumbList","@id":"https:\/\/tradeafricahub.com\/index.php\/instruments-traded-in-the-financial-markets\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/tradeafricahub.com\/"},{"@type":"ListItem","position":2,"name":"Instruments traded in the Financial Markets"}]},{"@type":"WebSite","@id":"https:\/\/tradeafricahub.com\/#website","url":"https:\/\/tradeafricahub.com\/","name":"Trade Africa Hub","description":"","publisher":{"@id":"https:\/\/tradeafricahub.com\/#organization"},"alternateName":"T.A.H","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/tradeafricahub.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/tradeafricahub.com\/#organization","name":"Trade Africa Hub","url":"https:\/\/tradeafricahub.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/tradeafricahub.com\/#\/schema\/logo\/image\/","url":"https:\/\/i0.wp.com\/tradeafricahub.com\/wp-content\/uploads\/2025\/05\/cropped-Texture-Watch-Instagram-Post-scaled-1.png?fit=2560%2C2360&ssl=1","contentUrl":"https:\/\/i0.wp.com\/tradeafricahub.com\/wp-content\/uploads\/2025\/05\/cropped-Texture-Watch-Instagram-Post-scaled-1.png?fit=2560%2C2360&ssl=1","width":2560,"height":2360,"caption":"Trade Africa Hub"},"image":{"@id":"https:\/\/tradeafricahub.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/instagram.com\/tradeafrica.co","https:\/\/wa.me\/254701657815"]}]}},"jetpack-related-posts":[],"jetpack_sharing_enabled":true,"rttpg_featured_image_url":null,"rttpg_author":{"display_name":"Admin","author_link":"https:\/\/tradeafricahub.com\/index.php\/author\/admin_u3leb0t8\/"},"rttpg_comment":0,"rttpg_category":null,"rttpg_excerpt":"In this lesson, we will take a look at instruments traded in financial markets and institutions. These are namely stocks, [&hellip;]","_links":{"self":[{"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/pages\/1106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/comments?post=1106"}],"version-history":[{"count":1,"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/pages\/1106\/revisions"}],"predecessor-version":[{"id":1108,"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/pages\/1106\/revisions\/1108"}],"wp:attachment":[{"href":"https:\/\/tradeafricahub.com\/index.php\/wp-json\/wp\/v2\/media?parent=1106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}