Financial products (instruments)

What are financial instruments?

A financial instrument is any item or group of assets that can be traded. Financial instruments contain properties that can be bought and sold and can be traded anonymously between unknown investors.

Where have you heard of financial instruments?

If you are an investor, your financial advisor may have discussed with you the advantages or other aspects of buying different financial instruments: stocks, bonds, derivatives wait. Media focused on personal finance will seek to guide readers to different financial instruments.

What you need to know about financial instruments...

Financial instruments are usually identical to many other assets (for example, shares of the same company) and are in a standardized form. Some will carry certain rights, such as bonds, to share in the proceeds, and shares, to participate in the affairs of the company, while others will not carry the relevant rights.

In addition to common financial instruments such as stocks, bonds, commodities and money market instruments, there are also futures and options. Derivatives, whose value is linked to the "underlying" instrument from which it is derived, hence the name. Commercial paper and loan packages are also financial instruments.