Difference between equity and derivatives

[azuvegihafov]

What is difference between equity and derivatives?

[BekasCMix]

Equity is financial term which is referred to as a financial tool to invite investors to invest funds in a company and share the owner ship of the company to the amount of investment they have made.

[Bitcroka]

Derivative: A derivative is a financial contract between two parties which derives its value from an underlying asset.

[admin]

From the trading prospective none - you trade it just as stocks.

From analysis prospective - with stocks you analyze stocks (technical and or fundamental analysis) and with ETFs you analyze instrument they track. Such, with SPY you analyze S&P 500 index (mostly you use technical analysis as fundamentals are done by Standard & Poors) and with GLD you analyze gold and etc.

From Risk prospective - ETFs are considered to be less risky, yet you can trade leveraged ETFs where risk is higher.