Which instrument does what?

You now know stocks, bonds, ETFs and funds — the four animals that make up most of every real portfolio on Earth. Before the unit checkpoint, let's take one lap of the full zoo, so no headline ever ambushes you with an unfamiliar species.

The core enclosure (you know these now)

• Stocks — own a piece of one business. The growth engine, and the bumpiest ride.
• Bonds — own a promise of repayment. The stabilizer, with capped upside.
• ETFs / index funds — own baskets of the above with one trade. The default building blocks of modern portfolios.

The exotic wing (know they exist; touch later)

• Options — contracts giving the right (not obligation) to buy or sell something at a set price by a set date. Powerful, double-edged, and the reason for many spectacular gains AND wipeouts you read about. They get respect and their own advanced courses.
• Futures — binding contracts to buy/sell later at a price fixed now; the professional tool of commodity producers, hedgers and index traders.
• Commodities — gold, oil, wheat: raw materials, usually accessed via futures or ETFs rather than warehouses.
• Currencies (FX) — the largest market of all by volume, where money itself is the product.
• Crypto assets — digitally native tokens on public blockchains, trading 24/7. So different in mechanics and risks that this Academy gives them a whole separate domain.

The honest map

A useful rule of thumb for what you'll meet in practice: the core enclosure covers the vast majority of long-term investing; the exotic wing exists mostly for hedging, speculation and specialized jobs. Nothing in the exotic wing is required to be a competent investor — and all of it assumes the mechanics in this unit are already second nature, starting with why a limit order differs from a market order.

In the data

The list of everything that trades on the US stock market labels each row with its animal. Here are its first two ETFs:

The labels on that list come from a short vocabulary: common stock, preferred stock, ETF, fund. That is the core enclosure, and the exotic wing is simply not in it. A futures contract is not a share: it trades on a futures exchange and named for what it delivers and when. A commodity price is usually the price of its nearest futures contract, named for the product — crude oil, gold — rather than for a company. And an option is a contract written on something else, one of thousands per underlying share, each with its own strike and date. So when a headline names an animal, the first question is which market it lives in, before what it costs.

Try it now — unit checkpoint warm-up

For each headline below, name the animal (answers in the checkpoint):

1. "Oil futures spiked 4% overnight."
2. "Investors rotated from tech stocks into short-term government bonds."
3. "Record inflows into S&P 500 index products this quarter."

Then count the enclosure. We counted the rows of that US list by label on 29 September 2026: 17,751 common stocks and 5,919 ETFs. Divide the first by the second. Roughly three companies for every basket, and the number is worth having in your head the next time someone says there are more funds than stocks.

If you can classify all three, walk into the Unit 3 checkpoint with confidence — then we head to the final unit of the course: what makes prices move, and what risk actually feels like.