A Brief List of Day Trading ‘Goods’
The types of day trading activities you may participate in oftentimes center on various types of ‘goods.’ Sometimes these are called ‘instruments’ or perhaps ‘commodities’ or ‘products.’
What this refers to is the various types of ‘objects’ for a lack of a better word that are traded daily. A brief list of day trading goods is presented below:
Stock-These are usually available in two forms, either common stock or preferred stock. The common stock variants are ones on which voting rights are exercised in corporate decisions. Preferred stocks are the type in which no voting rights are given to owners of shares, but are still entitled to receive a certain amount of dividends that can be issued to other shareholders.
Option-This is a contract between a buyer and a seller that gives a buyer the “right” to make purchases on or before the expiration date for the strike price (agreed price). This is not an obligation on either end, but rather a type of permission and a type of agreement.
Currency-This of course is known as the Forex or foreign exchange type of day trading. Major or minor currency pairs are traded in this practice. Major currencies of the world include the USD, the Japanese Yen, or the British Pound. There are dozens of others that are often traded as well.
Futures-This is similar to an option, which allows buyers and sellers to trade according to a contract. This is a commitment to purchase of certain stocks, commodities, or other financial products by a certain date.
Commodities-A buyer can usually trade commodities on contract. These locks in a certain price which a seller than agrees to. This often is done so that the buyer does not have to worry about the price of certain items such as corn, wheat, breakfast cereal, or other products rising after a sale is made.
Bonds-This is a security in which the owner is usually paid a certain amount of interest on an investment at a later date. This later date is usually referred to as the “maturity” date. This ownership is different from stocks in the event that the owners of them are really “creditors,” much like in the way a bank issues a loan.