Potential Investments
FOREX
FOREX is an abbreviation for Foreign Exchange and works through eschanging capital from one currency to another in hopes to benefit from the fluctating currency values. The table to the left shows this fluctation in real time. Even though exchanging currencies can be for any period of time it is often used as a short term investment wherein currencies are exchanged by the minute. Choosing how to trade FOREX is often through technical analysis of FOREX graphs or opinions on the strenght of a certain currency's economy.
FOREX is a type of investment which requires substantial financial knowledge.
Stocks
A stock can be defined as a certification of partial onwership of a firm. Stocks can be used in your advantage as the ownership can be sold at different prices over time depending on the market's outlook for the company and current progression of earnings and other indicators.
Many different strategies can be used when deciding which company to buy ownership of including searching for stocks with a lot of momentum, stocks that are undervalued or belief that their future outlook seems promising.
Like FOREX above technical analysis can be implemented and stocks can also be traded on the short term.
Overall stocks are seen as a safer investment than FOREX.
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Bonds
A bond is an investment wherein an investor/individual buys a bond from the government or a certian firm to supply them with cash. The bond will act like a loan wherein the investor will get paid back the original investment plus a certain yield/coupon. This allows you to receive more than what you originally placed in.
Bonds are often considered one of the safest securities. Which makes it an attractive investment when wanting to choose a stable investment.
Different bonds have different yields and different lenghts in which they will pay the coupon rate. The yield and time is often related to the chances the firm might default on the bond. In almost all cases bonds have higher yields if they are riskier as investors will want more in return due to the risk they are putting themselves in. When trying to decide whether the bond is risky, the ratings given to the bond ranging from AAA to D can be helpful.
Bonds can also be sold before the maturity date which can be a useful tool when wanting to profit from bonds on a shorter term
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Options
An option is a contract (legal deal) giving the buyer the right—but not the obligation—to buy or sell the underlying asset at a specific price on or before a certain date.
A call option gives the right to buy a stock at a certain price .While a put option gives the right to sell a stock at a certain price.
A premium is the current market price of an option contract, it also represents the income received by the issuer of the contract.
The strike price is the set price at which a stock can be bought or sold when the option contract is exercised.
People use options for income, to speculate, and to hedge against risk/volatility in the market, limiting losses.