Speaker A
All right, everyone. Chapter two. Hopefully, chapter one has given you some insight into the workings of financial markets, and I hope you found these sources interesting and that you've gained some new perspective on this game.
Overview of financial markets, focusing on types, assets, instruments, and key concepts like capital markets, derivatives, Forex, and commodities.
Key Takeaways
- Capital markets and Forex are the primary focus areas for understanding financial markets in this course.
- Derivatives are complex but crucial financial instruments, with futures being the most emphasized.
- Commodities represent an important asset class tied to natural resources.
- Understanding market mechanics like spot vs futures, leverage, and brokerages is essential for traders.
- Financial markets are interconnected, affecting various asset classes including cryptocurrencies.
What the video covers
- Introduction to financial markets with a zoomed-out perspective narrowing down to specific market types.
- Focus on capital markets, including stock markets (primary and secondary) and currency markets (Forex).
- Explanation of different asset classes such as shares, bonds, commodities, and derivatives.
- Discussion on derivatives including futures, options, and swaps, with emphasis on futures and swaps.
- Overview of money markets and their complexity, noting they require separate detailed study.
- Insight into commodities as natural resources like gold, silver, and agricultural products.
- Introduction to Forex markets, currency valuation, and their impact on investments including cryptocurrencies.
- Explanation of trading concepts such as spot and futures markets, leverage, and brokerages.
- Mention of becoming a funded trader and how it allows trading with relatively low capital.
- Emphasis on the interwoven nature of financial systems and the importance of understanding market components.
Chapters
- 00:00Introduction to Financial Markets Overview
- 01:02Minimizing Slides and Moving to Browser Sources
- 01:54Complexity of Money Markets
- 02:47Focus on Capital Markets and Stock Markets
- 03:45Deep Dive into Shares and Market Participation
- 04:37Commodities as an Important Asset Class
- 05:31Introduction to Futures and Derivatives
- 06:31Derivatives: Futures, Options, and Swaps Explained
- 08:16Trading Practices and Becoming a Funded Trader
- 11:09Understanding Forex Markets and Currency Valuation
Full Transcript — Download SRT & Markdown
Speaker A
mentioned we start from up High completely zoomed out and we're going to zoom in more and more so that's what we're doing this chapter as well and this chapter is all about financial markets the the types of financial
Speaker A
So, as I mentioned, we start from up high, completely zoomed out, and we're going to zoom in more and more. So that's what we're doing this chapter as well. This chapter is all about financial markets, the types of financial markets, I should say, assets that we find there, and instruments that we can use, actually.
Speaker A
the slides to a minimum actually so actually let's just make our way to uh to the browser so first up First Source types of financial markets um you don't necessarily need to understand everything but this helps you to create a view on what is actually
Speaker A
Yeah, so chapter two, that's where we are. So, as mentioned, I'm going to cut these slides, and I'm going to keep the slides to a minimum, actually. So, actually, let's just make our way to the browser.
Speaker A
course so the thing that we are going to be uh focusing on most of all is the capital markets and as a bit of currency markets as well so we will talk a little bit about Forex because it is quite
Speaker A
So, first up, first source: types of financial markets. You don't necessarily need to understand everything, but this helps you to create a view on what is actually going on.
Speaker A
Forex game so we will you will come to see them later on um but this is our main focus I would say so the shares obviously we're going to look at stock markets uh bit primary and secondary but mainly just Capital
Speaker A
So, for example, money markets. If we were to do a course or if we were to try to, you know, explain, cover everything that is involved with money markets, we would need an entire separate course.
Speaker A
extensively it's in it's important that you know what it is but we don't for now at least need to understand the full workings again each of these sections is probably you know an entire bachelor degree uh or even the Master's Degree if
Speaker A
So, the thing that we are going to be focusing on most of all is the capital markets and a bit of currency markets as well. So, we will talk a little bit about Forex because it is quite a huge topic. Many traders venture into that direction, and we actually are teaming up with, at least for this edition, some cool guys who are very good at the Forex game.
Speaker A
this in a very uh basic sense so we will be looking at spot and Futures markets by the way what that actually means what is the future what a spot uh how does that work we will be looking at that
Speaker A
So, you will come to see them later on. But this is our main focus, I would say. So, the shares, obviously, we're going to look at stock markets, a bit primary and secondary, but mainly just capital markets.
Speaker A
things there are certain category a certain asset class we call them and they have their own characteristics their own products uh designated places at which you can trade or invest trade them or invest in them and yeah it's
Speaker A
So, this is just like terminology to give you a perspective, okay? Like, what do financial markets actually consist of, right? So, we'll be focusing on capital markets in this sense. Bonds, we're not going to cover extensively. It's important that you know what it is, but we don't, for now at least, need to understand the full workings.
Speaker A
amazing by the way old videos but it doesn't make you know the content that is actually shared here less relevant like on the contrary believe me um derivatives so you may or may not have heard of that so derivative is a
Speaker A
Again, each of these sections is probably, you know, an entire bachelor degree or even a master's degree if you really want to, you know, dive deep into it. So, we zoom in and focus on the shares part and the, yeah, they're actually participating in financial markets part.
Speaker A
derivatives how can we classify them well we have Futures options and swaps um we will be talking about Futures and swaps in this program uh Futures probably most of all swaps just a tiny bit definitely not the traditional
Speaker A
So, this is a good overview we found to help you understand at least this in a very basic sense. So, we will be looking at spot and futures markets, by the way. What that actually means, what is the future, what is a spot, how does that work? We will be looking at that.
Speaker A
a little bit but I'm nowhere near specialized enough to uh to claim that you know I'm an authority that can teach you about options so that's also still a topic for me that is it's on the list to
Speaker A
Commodities is one type of asset or asset class, I should say, that is really important to understand. So, I'd like to think of this as natural resources. So, anything like gold, silver, water, corn, copper, all these types of things.
Speaker A
component they are huge huge markets uh and we'll be trading uh or at least you'll the chances are that you will be trading derivatives if you go on to crypto exchanges for example um and they're quite accessible nowadays
Speaker A
There is a certain category, a certain asset class we call them, and they have their own characteristics, their own products, designated places at which you can trade or invest, trade them or invest in them. And yeah, it's just really important to me.
Speaker A
amounts that you buy work are different you have different brokerages who specialize in different you know uh Services when it comes to these markets so quite important but I do know that the Forex Market is quite popular among
Speaker A
This will also be the bridge, for example, towards futures, but I will let the video and the sources do their own work. But yeah, very interesting. This channel is amazing, by the way. Old videos, but it doesn't make, you know, the content that is actually shared here less relevant. On the contrary, believe me.
Speaker A
actually like and how you can with relatively little amount of capital from your own home actually become a Trader at a firm sort of indirectly and yeah like like I said like I'm not doing that so I will let somebody else
Speaker A
Derivatives, so you may or may not have heard of that. So, a derivative is a product that derives its value from something else, and in the case of finance, we say an underlying asset.
Speaker A
in comparison to the the US dollar like what does that mean what are the implications of that because these implications uh also are you know they have an effect on for example the average person who invests in cryptocurrencies right something that
Speaker A
So, we have, for example, a stock, and then we have stock derivatives. So, let's say we have Tesla, and then we have Tesla derivatives. How can we classify them? Well, we have futures, options, and swaps.
Speaker A
the basics of the components that we are working with before I get into you know repeating myself let me stop there um Forex is measured a little bit different so it's important to understand how the the numbering of of
Speaker A
We will be talking about futures and swaps in this program. Futures probably most of all, swaps just a tiny bit, definitely not the traditional market swaps as they were invented, but mostly futures.
Speaker A
same thing it often Rhymes but there are differences and we just need to get an understanding of what products we're buying how we're buying that uh what we're paying for them the fees attached to that that sort of stuff right so but
Speaker A
And this is also, for example, futures is the thing that I trade most. I do know a thing or two about options. I used to trade them in my early 20s for at least a little bit, but I'm nowhere near specialized enough to claim that, you know, I'm an authority that can teach you about options.
Speaker A
little bit the introduction to leverage and Leverage is something that we will come back to in week five when we talk about risk management so we will talk about what it how it actually works um but for now it's a good introduction
Speaker A
So, that's also still a topic for me that is on the list to really master, but it's a whole study in of itself. So, I just simply haven't had the time yet to really pick that up and master that part of the game.
Speaker A
sort of like the risks attached to that but also how you can use it in a creative uh effective way when it comes to actually allocating your portfolio or your capital in a certain way that you can actually safely use margin and it
Speaker A
Anyway, so derivatives is a crucial component. They are huge, huge markets, and we'll be trading, or at least you'll, the chances are that you will be trading derivatives if you go on to crypto exchanges, for example.
Speaker A
risk uh properly so but I think that's for week five just to give you a heads up on where we're going um but there's a lot of Leverage involved in Forex and that's why it's crucial it's crucial to to know the
Speaker A
And they're quite accessible nowadays, so it's important to understand what they are and how that works. Forex, as mentioned, so the trading of currencies, it's a slightly different market than the stock market.
Speaker A
want to really understand and practice with options you need months probably and to understand to master it takes probably even longer so don't let that scare you by away options are absolutely fantastic and they serve their own purpose within financial markets they
Speaker A
So, the opening hours are different already. The way the amounts that you buy work are different. You have different brokerages who specialize in different, you know, services when it comes to these markets.
Speaker A
you could use put options in this case to bet on the the potential downturn of the the price of of Amazon so that's the advanced Source a contrary to the first week this is not mandatory but if you are interested in this it is
Speaker A
So, quite important, but I do know that the Forex market is quite popular among younger traders, and we will talk plenty about that.
Speaker A
would say uh I think it's perspective time so bear with me as I get used to this setup myself as well um some perspectives um again I may repeat a thing or two but uh I think we cannot repeat things enough
Speaker A
So, something that has gained popularity recently is becoming a funded trader. What that is, we will discuss in length, and we will have our partners discuss that as well, what that is actually like and how you can, with relatively little amount of capital from your own home, actually become a trader at a firm sort of indirectly.
Speaker A
this works I know what this works now the Practical example of knowing how all the instruments that uh how all the instruments work is that for a given scenario within financial markets or within uh for example a bull market bull
Speaker A
And yeah, like I said, I'm not doing that, so I will let somebody else explain that in great detail, but it's really, really quite interesting.
Speaker A
um gives the opportunity to use a certain instrument for example a Futures Contract or for example using options if you do not know what those are like derivatives for example then you are basically stuck with buying something like you buy something and
Speaker A
So, obviously, Forex markets, so the currency markets in itself are really interesting to understand. Like, okay, what does it mean when the dollar loses strength, right? When the euro gains value in comparison to the US dollar, like what does that mean?
Speaker A
you can use that just make you tweak your your strategy just that bit more and one of the you know results of that is that you know obviously if you spend the time to actually learn that that you
Speaker A
What are the implications of that? Because these implications also have an effect on, for example, the average person who invests in cryptocurrencies, right? Something that happens in the capital markets or in the Forex market, sorry, can have effects on, you know, on other markets.
Speaker A
something about the fundamentals of a company for example that tell you that tells you maybe now is not the time to be 100 invested but maybe you should you know de-risk as we as we say and decrease your position into in a company
Speaker A
This financial system is all interwoven, and we need to understand that. So, we need to understand at least the basics of the components that we are working with.
Speaker A
said with options you can do that with Futures as well you can bet against the market now one thing uh one term that I can drop already this is something called uh something called hedging for example is protecting your portfolio
Speaker A
Before I get into, you know, repeating myself, let me stop there. Forex is measured a little bit differently, so it's important to understand how the numbering of units works, right?
Speaker A
better in in in the future but um what my point here being is that we have all these instruments and they serve a role they are used very widely and get any certain circumstances allow you to use that to your advantage to
Speaker A
It's different. It can be different for every category or for every asset class or for every asset, and it can even differ, you know, like between crypto and traditional markets. There are huge differences.
Speaker A
company uh allows you first of all to decrease your position but then actually maybe take the other side of the bed where you say like okay well you know this company is currently valued at like a billion dollars but considering
Speaker A
It's all sort of like the same thing. It often rhymes, but there are differences, and we just need to get an understanding of what products we're buying, how we're buying that, what we're paying for them, the fees attached to that, that sort of stuff, right?
Speaker A
on why it is important to understand these assets I said that in the in the previous edition of tdfa we are going to give you a nice tool belt and then at the end of that you we are going to
Speaker A
But anyway, back to Forex. This is crucial to understand if you want to understand how Forex works. So, we've put that in there for you to read through. This is also your first, as I slide down a little bit, the introduction to leverage.
Speaker A
doing right um so that's on the importance of understanding the assets the types of assets the asset classes for example how hedging works so gold I'm going to round up gold always used to be a good inflation hedge so you know if you
Speaker A
And leverage is something that we will come back to in week five when we talk about risk management. So, we will talk about what it is, how it actually works.
Speaker A
want to get to to become masters of your own Finance finances of Masters of your portfolio and you have the tools and skills to actually manage that uh to perfection okay that's it for this video I hope that was a good enough perspective
Speaker A
But for now, it's a good introduction. So, it actually allows you to trade or invest with more money than you actually have in your account, right?
Topics:financial marketscapital marketsForexderivativesfuturesoptionsswapscommoditiesstock markettrading
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