Yusra3
VIP Contributor
It's no secret that money is a big part of life. But if you don't know how to manage it, or even where to start, it can feel like a daunting task.
If you're looking for some help with your finances, here are 3 topics that are important for every adult:
1. What is a stock?
Stock is an ownership interest in a corporation. It's equivalent to owning shares of a company. That means if you own stock, then you have an ownership stake in the company. The more shares that are sold, the more money you make but also the greater risk associated with investing in stocks.
2. What is an option?
An option is a contract between two parties: the buyer and seller of an option contract. The buyer has the right but not the obligation to buy or sell something at a set price during a specific time period (the "expiration date"). The seller agrees that if no transaction takes place by expiration date, then he will pay out some amount of cash based on how much he sold his option for at that time.
3. What is leverage?
Leverage refers to using borrowed money (lenders) to buy stocks or other financial instruments that may or may not increase in value over time (investors). Leverage can be very helpful if used properly but it can also lead investors into trouble if they don't understand how much debt they're taking on when purchasing shares of stock with borrowed money!
If you're looking for some help with your finances, here are 3 topics that are important for every adult:
1. What is a stock?
Stock is an ownership interest in a corporation. It's equivalent to owning shares of a company. That means if you own stock, then you have an ownership stake in the company. The more shares that are sold, the more money you make but also the greater risk associated with investing in stocks.
2. What is an option?
An option is a contract between two parties: the buyer and seller of an option contract. The buyer has the right but not the obligation to buy or sell something at a set price during a specific time period (the "expiration date"). The seller agrees that if no transaction takes place by expiration date, then he will pay out some amount of cash based on how much he sold his option for at that time.
3. What is leverage?
Leverage refers to using borrowed money (lenders) to buy stocks or other financial instruments that may or may not increase in value over time (investors). Leverage can be very helpful if used properly but it can also lead investors into trouble if they don't understand how much debt they're taking on when purchasing shares of stock with borrowed money!
