The instrument is the thing with a specification
A market is the category. An instrument is the listed thing you can actually buy or sell: a share, an ETF, a futures contract, an option on that future, a spot pair, a perpetual swap. Each one has rules. Those rules are the specification.
Stocks and ETFs
A stock is one company. An ETF is a fund that holds a basket and trades like a share. The ETF can track an index and still drift from the index by its expenses, its holdings, and the premium or discount of the share to the basket. "It tracks the S&P" is not "it is the S&P."
Indexes you will hear every day
The S&P 500, the Nasdaq-100, the Dow Jones Industrial Average, and the Russell 2000 are not interchangeable. They weight companies differently and they hold different names. A futures contract on one of them is a derivative of the index, with its own expiry and multiplier.
Futures, in outline
A future obligates you to the price of the underlying at a later date, and the exchange standardizes the size, the tick, and the expiry. Margin on a future is a performance bond posted with the clearing house. It is not the same word as a stock-margin loan. Leverage is the contract size divided by the money you posted. This course does not pick a contract for you and does not size a trade.
Not in this chapter yet: option payoff and delta, future-options, spot FX pricing and basis, crypto perpetuals and funding, and the 12-hour applied practice lab. This chapter cannot be marked complete, and its instrument sheet has not been generated.
