What is the difference between stocks, bonds, futures, options and derivatives?
In: Economics
Stocks are pieces of a company. Owning a stock gives you a share of any dividends the company pays out according to how many shares you own and vote on directors with one vote for every share you own.
Buying a bond is like issuing a loan or buying debt from the loan issuer.
Futures are contracts to buy an asset at a future date
Options are contracts like futures, except the buyer can refuse the purchase when the option date comes up
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