Extreme basics

soosta

Member
70 0
:eek: Could someone PLEASE give me some answers to the following:

What is an option, future and a contract for difference?

What makes up the FTSE 100, I know its the top 100 companies but what is the figure made from - is it maybe the value of the top 100 companies shares added together!?

Also, what are the major traits of the FTSE 100, Dow Jones and Nikkei. I hear the Nasdaq index is fairly volatile? what is the reason for this?

Thanks to anyone in advance who can help me out!

p.s. I know this is basic but you've got to start somewhere!!

cheers,
soosta
 

ewilcox

Active member
134 2
option: the right but not obligation to buy/sell a product a particular price at a particular time

future: an agreement to buy/sell a product at a specified price at a specified time

CFD: a financial product where you pay the difference between a starting price and a closing price multiplied by the number of items of the product when you close your position. e.g. Vodafone - enter into long position at 110 for 1000 shares. share goes up to 112 - you make 1000 x 2p = £20. can be used to leverage your capital but risky if you don't monitor your positions carefully.

hope that is of some help.

ew.
 
 
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