The foreign exchange market is the largest and the most liquid financial market in the world. This market allows businesses to convert one currency into another currency. The daily turnover is more than 3 trillion USD which overshadows the turnovers on the stock and bond financial markets altogether. The liquidity and competitive prices on this market are unsurpassable.
CFD is an investment instrument allowing the traders to access online price movements of stocks and commodities without their ownership. It is traded with more than 5 000 different CFDs and 15 indicial CFDs available on 23 international stock markets. The advantage of this market is the possibility to gain a profit even if the instrument price declines.
A future contract may be characterized as a contract between two traders about a purchase/sale of a certain amount of commodity delivered in the specified quality, for the agreed price and to the specific date. On most of the commodities and financial instruments, which can be traded on the world market, there are Futures contracts. Whether it is as individual stocks, indices, cocoa, currency, oil, cotton, wheat or gold, trading is possible on the most important capital markets from Chicago to Singapore.
Exchange Traded Funds are investment trust funds that are traded on Stock Exchange markets. ETF offer wide and various expositions in comparison with other stocks as they are ideal for diversification of the portfolio. Currently the most accessible are index-tracking ETF which invest into a specific portfolio of securities by the index, stocks, bonds, a sector-specific or a regional sector.
Stock is defined as a commercial instrument that signifies an ownership position (equity) in a corporation, and represents a claim on its proportional share in the corporation's authorized capital. The owner of the share is a shareholder who has certain privileges resulting from the ownership, usually a share in profits and corporate decision-making.
A bond is understood as a commercial instrument, in which the authorized issuer is obliged to pay the holder a certain amount of money on a due date, including relevant interest. Unlike stocks, bonds provide a predetermined financial yield. Bonds are usually traded on the OTC (over-the-counter) market and their price depends on interest rates. Investment into the bonds is quite difficult for a physical entity due to higher nominal values. One kind of specificity is government bonds. It is particularly for their lower interest yield and a lower risk associated with a state bankruptcy.
Apart from the traditional investment instruments mentioned above, there is a possibility to invest in non-traditional investments. The most commonly used are investments into precious metals and stones.
Precious metals, silver and gold are among the wide range of available commodities. They are ideal products both for long-term and short-term speculative investment. Investment into precious metals is the most commonly used method of alternative investment. Of all the precious metals, gold is the most popular among investors due to its interesting valorisation and low dependence on economic development or the capital market.
According to investors, diamonds are considered to be a worldwide recognized commodity. The advantages of diamonds are their indestructibility, limited quantity, free negotiability of polished diamonds, and that they are not subject to any registration. Diamonds do not produce regular business revenues and thus cannot be compared to investment into the traditional instruments. It is a long-term investment, minimally for 5 years or more, with the aim of investing part of the funds into a constant value, which can survive any political or economic crisis.