Asset classes
In market finance, an asset class groups instruments that share similar return and risk drivers (rates, growth, USD, volatility, etc.). This is not the same as a contract type (spot, future, option…): one class can be traded through many vehicles — see Contract types.
Summary table
| Class | Examples | Typical instruments | Main drivers | Notes |
|---|---|---|---|---|
| Equities | Single stocks, indices (S&P 500, FTSE…), sectors | Spot, ETFs, CFDs, index futures, options | Growth, earnings, risk-free rates, equity risk premium | Beta vs benchmark; correlations spike in market stress |
| Rates / fixed income | Sovereign and corporate bonds, yield curve | Cash bonds, rate futures (SOFR, Bund…), swaps | Monetary policy, inflation, credit spreads | Duration / convexity; inverse price–yield relationship |
| Credit | IG, high yield, CDS, credit indices | Bonds, CDS, credit ETFs, sometimes options | Default spreads, economic cycle, liquidity | Often equity-like in crises; distinct from “risk-free” sovereign rates |
| FX | G10, majors (EUR/USD…), emerging FX | Spot FX, forwards, NDFs, FX options | Rate differentials, trade balance, risk-on / risk-off | Pair = base / quote; mind long/short convention |
| Commodities | Energy (oil, gas), metals, agriculture | Futures, commodity ETFs, options on futures | Supply / demand, inventories, USD, geopolitics, seasonality | Contango / backwardation on futures curves |
| Crypto | BTC, ETH, altcoins, stablecoins | Spot, perpetuals, CEX/DEX futures, options (growing) | Liquidity, regulation, risk-asset correlation, funding rates | 24/7 markets; volatility and counterparty risks |
| Volatility | VIX, index / single-name implied vol | Options, variance swaps, VIX futures | Skew, term structure, vol mean reversion | “Derived” class: often hedge or overlay on equity books |
| Alternatives | Listed real estate (REITs), infra, indirect private equity | ETFs, fund shares, listed vehicles | Illiquidity, discount/premium to NAV, macro cycle | Often outside intraday trading scope for many vehicles |
| Cash / money markets | Deposits, bills, money market funds | Cash, repo, short-term bills | Short rates, monetary policy | Opportunity cost and leverage reference |
Correlations (quick reminder)
Cross-class correlations are not stable: they often rise in stress (flight to quality, simultaneous risk-asset selling).
Risk-on: equities, crypto, carry FX often move together.
Risk-off: sovereign bonds, USD, gold (often); spreads compress until credit breaks.
Vol: tends to rise when equities fall (except short-lived decorrelation).
To add: regime correlation matrices, historical examples (2008, 2020, 2022…).
Incremental draft: rows to expand (e.g. G10 vs EM FX, commodity sub-classes, on-chain vs CEX crypto). Natural next step: Contract types page.