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Equities/Shares
Shares of listed companies are traded on the equity market. The holder of a share is a shareholder and owns a share or fractional part of the issuer. Shareholding does not only give the owner a right to a portion of the company’s equity, but also provides voting rights at shareholder meetings where key company actions and decisions are concluded.
A company’s market value is calculated by multiplying the share price by the number of shares. Several factors influence the share price and its development, including demand and supply, expected future profit growth and access to capital. Expectations regarding the general share price development can be based on various business and market factors, such as macroeconomic conditions.
Exchange traded funds – ETF
An exchange traded fund is traded on the exchange in the same way as shares, and provides the same degree of diversification as mutual funds. It is usually based on an index consisting of the most heavily traded shares on an exchange or market. A single trade therefore brings you a portfolio of shares corresponding to the given index.
Convertibles
A convertible security is a security that can be converted into another security, for example, a bond that under certain terms can be converted into equity.
Bonds
A bond is a promissory note issued by a government, municipality or company. The issuer is indebted to the holder and is obliged to re-pay the principal and interest called the coupon, which is usually fixed for more than a year. There are a number of different bonds on the market.
DerivativesThe term derivative comes from the word derive - a derivative instrument derives its value from an underlying instrument which is often a share, an index or a fixed income product. There are two main types of derivatives: futures and options.
A future or a futures contract is an agreement between two parties on the purchase or sale of an underlying asset on a stated future date at a price agreed.
An option or an option contract is an agreement between two parties granting the buyer (the holder) the right, but not the obligation, to buy or sell an underlying asset at an agreed price. For this right the buyer pays an option premium to the seller. The seller is obliged to accommodate the holder's right at any time.
Warrants
Warrants are very similar to options. The main difference is that warrants can only be issued by financial institutions like banks or brokerage firms to then be traded on the market. Moreover, warrants are not standardized in the same way as options, meaning that the terms and conditions may vary among the various issuers. To Warrant product description
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