FOUR UNDERLYING ASSETS
Due to their history different countries and regions have developed different currencies. You have certainly had that experience on your vacations, you might still keep the change in your drawer.
“Did you know that the daily trading volume (i.e., the amount of money) in currencies is about € 4.8 trillion? Imagine, you are spending the annual revenue from Japan, every day! Incredible!”
The term commodities refers to natural resources that are derived from nature. These are mostly used as raw material for other products. For example a Rolex watch is made out of gold and platinum. Gasoline for your car is made from oil.
“Did you know that approximately 155,000 tons of gold were produced in total since the beginning of mankind? That’s no more than a cube with a length of 20m, except that this cube would be worth about € 271 billion!”
An index (plural indices) always represents a particular market. A few common variants are stock or sector indices. The most famous stock index (only listed companies) is the American Dow Jones, which is considered to be stable. It stands for the US economic development.
“Did you know that the Dow Jones index is calculated since 05.26.1896? Half of the 30 companies contained have been represented there for 20 years. The oldest company (General Electric) since 1907, that what I call stability.”
A stock price reflects the value of an investment in a company. This is determined by dividing the total value of the company by the total number of shares issued. The fluctuation in the market is mainly determined by supply and demand. Corporate data will have significant influence on it.
“Did you know that Apple and Google were the two most valuable brands in the world in 2014? Just think how many times a day you are searching for something on Google, or see an iPhone.”