Chapter 4
Assets 102: ETFs, Cryptocurrency, Options, and Derivatives
IN THIS CHAPTER
Expanding the pool of trading tools
Trading sector trends with ETFs
Inventing opportunities from invented money
Deriving profits from derivatives
Arbitraging your way to new opportunities
The basic financial assets — stocks, bonds, cash, and commodities — do a pretty good job of creating opportunities for people to hedge and speculate, but they have some limitations. The basic assets are just that: they’re securities that represent ownership in a business, a loan to a government or corporation, raw materials, or cold hard cash. They are nice, concrete, easy.
But they aren’t perfect. Nothing is, right? Some people wanted other ways to trade these assets, or parts of these assets, or hedge themselves against the financial risks that come with owning the underlying asset. The result of research, market demand, and more than a little financial engineering come the alternatives that I cover in this chapter. ...
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