Financial Product (Instrument)

A financial product, also known as a financial instrument, is a contract that represents a legal agreement involving financial value. These products can be traded in financial markets and include a wide range of assets such as stocks, bonds, derivatives, mutual funds, and forex. Financial instruments are used for investment, speculation, hedging, and financing purposes. They are classified into categories like equity instruments (stocks), debt instruments (bonds), and derivative instruments (options, futures).

Example

A stock is a financial product that represents ownership in a company, giving the shareholder a claim on part of the company’s profits.