If you are the one who invests highly in stocks, then you may be missing out on some great opportunities that might have come in your investing journey. Different types of instruments are available in the Indian market in which you can invest and earn great profits.
In this article, we’ll learn about the different instruments available in the Indian stock market apart from the stocks.
Different types of Alternative Online Instruments
Alternative instruments other than stocks can help you add a greater level of diversification to your portfolio and balance out your risk and return goals. Here is the list of types of alternatives online investment options available in India:
1. Futures and Options
Futures and options (F&O) are the two types of derivatives whose values are dependent on any underlying asset such as stocks, currency, commodity, index, etc. Futures come with an obligation to buy or sell the underlying asset on the expiry date.
On the other hand, options provide a choice to buy or sell the underlying asset after paying a premium amount to the other party.
2. Commodity Trading
In commodity trading, you can easily trade on different instruments such as silver, gold, crude oil, natural gas, and aluminum. You don’t have to get into the hustle of buying or selling these assets in the physical form which poses a risk of theft and loss.
You can trade in commodity futures and commodity options and take the position according to your choice and risk profile.
3. Currency Trading
In currency options and futures, you can take positions on the basis of the different underlying currency combinations such as USD-INR, EUR-INR, JPY-INR, GBP-INR, EUR-USD and GBP-USD.
You can take leverage positions in different currencies F&O and earn from the rate differences in the two countries’ currencies or hedge the risk of losing the money.
4. ETFs
Exchange-traded funds allow you to buy the bundle of stocks at one go because these funds track the stocks of a benchmark index and invest in the stocks in the same weightage.
ETFs provide you a dual advantage in a way that you can buy or sell them easily at a current market price like a stock. Also, you can get a complete diversification advantage which is not available in individual stock.
5. REITs Stocks
Apart from the normal stocks, you can invest in the stocks of REITs (Real Estate Investment Trusts). These companies are engaged in the business of real estate operation or financing.
You can get the chance to invest in real estate without investing lakhs or crores of rupees in property. These REIT stocks are available at a much lower price, say for less than ₹500. Also, the liquidity is high in this type of real estate investment.
Conclusion
You can choose to invest in different types of alternative online instruments other than stocks to expand the base of your portfolio. These instruments are futures and options, commodities, currencies, ETFs and REITs stocks. If you want to access and invest in all of these different instruments on a single app, then you can download the Dhan Online Trading App.
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