Institutional investing is all about big money. We’re talking insurance companies, pension funds, mutual funds, investment banks and hedge funds. For most investors, buying or selling stocks has very little effect on the stock as a whole. When big money moves, it shapes the market. This course is the ultimate guide to how giants invest their money.
A derivative is a contract that is based on, or derived from a certain asset. Derivatives can be based on stocks, bonds, interest rates, currencies and commodities. They are commonly used to protect against risk or to speculate. When big money gets involved, derivatives have big implications for the market as a whole.
A commodity is a good that is interchangeable with commodities of the same form. This includes things like oil, soybeans and gold. Commodities use a basis grade as a benchmark for quality. All goods from around the world that meet the basis grade are considered to be equal if its the same commodity. This consensus makes it easy for big money to come in and make massive deals.
The FOReign EXchange market is where the world’s currencies are traded. Whether its US dollars, Euros or Canadian dollars, each country has its own currency. In order for countries to trade, their money has to have some relative value on the world stage. What’s easier to trade then money?