Financial trading refers to buying and selling assets in various markets. To get started, you need a brokerage account linked to one or more trading platforms on which you can execute trades.

There are many types of assets you can trade. They include the following:

1. Stocks

Stocks or equities are assets that endow ownership claims in a company. Stocks are traded as shares; you can buy and sell them on stock exchanges. The New York Stock Exchange, Abu Dhabi Securities Exchange, London Stock Exchange, Nasdaq, and Dubai Financial Market are examples.

The value of the shares of a stock depends on the company valuation. Technically, a 30% equity share means you own 30% of a company. Of course, if the company subsequently raises capital through funding rounds, your ownership stake will get progressively smaller.

2. Bonds

Bonds are debt securities. When you own bonds, the bond issuer (typically corporations, governments, and municipalities) owes you money and has promised to pay you interest and pay off their debt at a particular future date.

Where can you trade bonds? You can buy and sell them in the bond markets of the major stock exchanges. Your bank or your favoured brokerage firm may carry them, and you may also be able to purchase them directly from corporations, municipalities and governments.

3. Foreign Exchange (Forex)

You can buy and sell currency. There is no central marketplace for trading exchange rate pairs, and forex trading takes place over trading platforms that connect traders via extensive computer networks.

4. Commodities

Commodities are physical goods, including precious metals, natural gas, crude oil, cocoa, coffee, and cotton. Many factors determine commodity prices, but generally, they depend on supply and demand. You can trade commodities in commodity exchanges, including the London Metal Exchange, Chicago Mercantile Exchange, Tokyo Commodity Exchange, and New York Mercantile Exchange.

5. Cryptocurrencies

Cryptocurrencies are digital currencies whose existence and ownership are maintained through shared digital records in a decentralised system. They are traded in cryptocurrency exchanges, including Binance, Coinbase, Pro, Huobi, and Kraken.

6. Options

Options are instruments derived from the value of underlying assets. These can be stocks, bonds or commodities, among others. An options contract endows the option holder with the right (but does not oblige them) to buy or sell the contract's underlying asset at the preset fixed price (i.e., the strike price) on or before a specific date. Meanwhile, it obliges the option writer to buy or sell the asset if the option holder exercises their option.

You can purchase and sell options in options exchanges, including the Chicago Board Options Exchange, NASDAQ OMX PHLX (Philadelphia Stock Exchange), International Securities Exchange, and the Eurex Exchange.

7. Futures

Futures are also derivatives, and they're contracts obligating both parties to fulfil their role as buyer or seller of an underlying asset at a predetermined price by a preset date (the expiration date). The underlying assets may be commodities, cryptocurrency, forex, interest rates, stocks, and stock indexes.

You buy a futures contract if you believe the underlying asset's price will increase and sell a futures contract if you believe otherwise. If you're the buyer and the price increases as you predicted, you may sell the contract before it expires to earn the difference between your purchase and selling prices. Likewise, if you're the seller and the price falls as expected, you can buy back the contract before it expires, thereby gaining from the difference between your selling and purchase prices.

Futures trading takes place in exchanges. They may be markets where options, commodities, stocks, or other securities and assets are traded. The Chicago Board Options Exchange, New York Mercantile Exchange, ICE Futures Europe, and Dubai Mercantile Exchange are some exchanges where you can trade futures.

8. Exchange-Traded Funds (ETFs)

Exchange-traded funds refer to funds that can be traded in stock exchanges. You'll find them where stocks are traded. ETFs are pooled funds invested in a basket of securities (e.g., stocks, bonds, commodities) that usually track the performance of a particular index (e.g., the Standard and Poor's 500 or S&P 500).

9. Contracts for Difference (CFDs)

Contracts for difference are derivative instruments that let parties speculate (and profit from) the price movements of underlying assets without actually owning these assets. A CFD is an agreement between two parties – typically the CFD trader and a brokerage that offers CFDs – to exchange the difference between the CFD's initial and final values. That's the difference between the asset's price upon contract establishment and its price upon contract dissolution.

The underlying assets can be anything. You can take CFDs on forex, indices, commodities, shares, ETFs, futures, and cryptocurrency, among others. You don't need to own an asset to open a CFD position on it; you may even open a position on leverage.

You can trade CFDs on various trading platforms if you have an account with a brokerage that facilitates CFD trading.

Start Trading

Trading refers to buying and selling assets based on how you think their prices will change. CFDs even let you use leverage and allow you to speculate and profit from the price movements of an asset without needing to own that asset first.