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Glossary
Asset
Definition
In derivative trading, asset is a common shorthand for the underlying asset. The underlying asset is the financial instrument that a derivative product — for instance, a CFD or an option — is based.
What is an asset?
An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit. Assets can be classified into various types, such as physical (real estate, machinery), financial (stocks, bonds), or intangible (patents, trademarks).
Why are assets important to consider when trading?
In trading, understanding different types of assets is crucial for portfolio diversification and risk management. Different assets have varying levels of risk and return, and their values can be influenced by different market conditions. By investing in a range of assets, traders can balance potential risks and returns, aiming for a more stable and profitable investment portfolio.