Types of financial instruments

[Starmix]

We need to know the types of financial instruments. We always talk about wealth, money-making, becoming a millionaire, or getting richer, so I assumed that all of us know about these types of financial instruments.I just want to review for other's sake. These are the following:

1. Cash instruments - This type deals with the values of cash instruments that are directly influenced and determined by the market. These can be transferred securities like stocks, and bonds which are the common examples of such instruments. This could be deposits and loans agreed upon by borrowers and lenders. One example of a cash instrument is check.

2. Derivative instruments - The value and characteristics of derivative instruments are based on the vehicle’s underlying components, such as assets, interest rates, or indices. There can be an equity option contract such as call option on a particular stock . The call option gives the right, but not the obligation, to buy shares of the stock at a specified price and by a certain date.

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[Fidelia]

These financial instruments like cheques can be accepted as means or payments. But they are losing popularity everyday.

 

[Starmix]

If one uses his stocks or bonds in converting it to cash it seems the need of money is very urgent. It looks like the stock or bond serves as the collateral.

 

[Augusta]

These financial instruments like cheques can be accepted as means or payments. But they are losing popularity everyday.

Yeah you are right I noticed same too. i think it is because of the ease of mobile transfers so there's no need for a lot of people to write out cheques

 

[Suba]

In a simpler sense, financial instruments are assets/capital that can be bought and sold, so that financial instruments can also give rise to obligations to pay and the right to receive returns. We are familiar with several types of financial instruments, such as: Cash instruments, derivative instruments (based on contracts), also instruments in the capital market such as shares, ETFs, bonds, etc. So checks are not a financial instrument.

 

[Starmix]

In a simpler sense, financial instruments are assets/capital that can be bought and sold, so that financial instruments can also give rise to obligations to pay and the right to receive returns. We are familiar with several types of financial instruments, such as: Cash instruments, derivative instruments (based on contracts), also instruments in the capital market such as shares, ETFs, bonds, etc. So checks are not a financial instrument.

There is nothing I can say more my friend. It's well elaborated by an expert like you. I am not an accountant.

 

[Springtime]

Frankly, I do not know much about financial instruments. I just invest in stocks, bonds and mutual funds.

 

[Starmix]

Frankly, I do not know much about financial instruments. I just invest in stocks, bonds and mutual funds.

I am also doing the same. I just ride on the tides of investment. I do checking and researching for updates.