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Financial market glossary: meaning of the main terms!

The financial market is becoming more and more diversified, adding innovative ways of investing and doing business, such as the tokenization of assets, but this is still a universe with complex terms for most people.

Unfortunately, this ends up driving away many potential investors, especially small ones, because they associate so many expressions with something difficult to manage and to understand if they are making the best choices.

With the popularization of cryptocurrencies and, more recently, asset tokens, the difficulties of understanding seem greater.

But they only really seem like it; with simple explanations, one can quickly understand the dynamics of traditional financial products and the revolutionary world of crypto-activities.

Therefore, BLOCKBR, a web 3.0 native company, brings you a glossary of the main financial market terms to help you decide your investments with more knowledge and confidence!

WHAT ARE SHARES?

Shares are the smallest portion of a company’s capital stock and are offered in the financial market through initial public offerings (IPO) with the aim of raising funds to be applied in business expansion and improvements.

In this way, people who buy shares become owners of pieces of the company. Purchases are always made on the B3 – Brazil’s stock exchange – and through a home broker, the platform of a brokerage house accredited with the CVM.

WHAT ARE BLUE CHIPS AND SMALL CAPS?

This is the classification of stocks according to their market value.

  • Blue-chip stocks have the highest market value and are tied to well-established companies with excellent shareholder returns;
  • Small-cap stocks are low market value stocks in low-volume trades, but with potential for appreciation and profitability.

WHAT ARE ASSETS?

Assets are all the goods and rights that a person, a group of people, or a company owns and can be classified as:

  • Tangible assets: are those that physically exist, such as real estate, equipment, production machines, inventories, vehicles, and works of art;
  • Intangible assets: are assets that cannot be materialized, such as intellectual capital, licenses, patents, franchises, software, receivables, investment portfolios, and property rights;
  • Digital asset: is the asset related to technology – website, social networks, e-commerce, and content published on the internet;
  • Financial digital assets: this is the category made up of crypto assets, such as scores in reward programs, cryptocurrencies, and tokens.

WHAT IS LIQUIDITY?

It is the speed of turning an asset into cash. The assets are divided into low liquidity, such as real estate, and high liquidity, such as the savings account. It is important to point out that an asset with good liquidity does not mean an asset with good profitability.

The ideal in an investment portfolio is to diversify assets with different liquidity so that it is possible to maximize gains and mitigate losses in the short, medium, and long term.

WHAT IS VOLATILITY?

Volatility is a measure that shows how vulnerable an asset is to market fluctuations and that it can suffer rapid and frequent gains and losses. The more volatile the asset, the more uncertain is its performance curve.

Stocks and cryptocurrencies are assets with high volatility, while fixed income securities are a low-volatility asset.

WHAT ARE COMMODITIES?

Commodities are those goods that are produced on a large scale in countries and largely destined for export, and that have over time assumed an important weight in the world economy to the point of becoming investment products.

The most common examples are coffee, soybeans, corn, oil, gold, and wheat. Commodities are traded in the traditional way, in the domestic and foreign markets, and in futures contracts at B3.

WHAT ARE COMMODITIES?

How is the crypto and tokenization market outside of Brazil!

WHAT IS FUTURES MARKET?

The futures market is a segment of the financial market where future purchase and sale contracts are negotiated for the settlement at a stipulated price of a certain quantity of an asset in an established time frame.

The operations are managed at the stock exchange and must be done through a home broker at a brokerage house accredited at CVM. Financial assets are traded – dollar, euro, and indexes – or commodity futures contracts – cattle, soybeans, and coffee.

WHAT ARE CRYPTOCURRENCIES?

Cryptocurrencies are a monetary reserve in the form of encrypted files that pass between the digital wallets of people around the world as a form of payment and investment, the most famous of which is bitcoin.

Their main characteristic is decentralization – there is no entity, globally or within countries, that controls, regulates, and collects a tax or fee for transactions. Cryptocurrencies are created and traded on blockchains.

Click on our article and learn more about blockchain!

WHAT ARE TOKENS?

Tokens are encrypted files developed with blockchain technology, but unlike cryptocurrencies, which are a monetary representation in themselves, tokens represent the value of the asset to which it is tied.

Tokens are the revolution in the way of doing business on a global scale, as they allow products, services, rights, and goods to be traded with more availability, agility, security, and greater profitability.

WHAT ARE PRIMARY AND SECONDARY MARKETS?

These are the markets where company shares are traded, and the difference between them is very simple: In the primary stock market, the company’s offering takes place, while in the secondary stock market, it is the shareholders who trade their shares with third parties.

These concepts exist in the world of asset tokens: in the primary token market, the offerings of tokenized assets by the owners happen, and in the secondary token market, all the deals by investors with other stakeholders occur.

WHAT IS TOKENIZATION?

A
tokenization
is the innovative process of representing and offering goods, services, products, and rights through encrypted files – the token. They are created on a blockchain and offered on a crypto-active platform like BLOCKBR‘s.

One of the main benefits of tokenization is the absence of intermediaries that need to exist in stock offerings and other financial products.

This speeds up transactions and reduces the cost of purchasing tokens of various assets, from receivables to business projects to every type of trade possible.

Tokenization allows you to raise funds or generate continuous revenue in an agile, secure manner, with total availability and attracting all investor profiles, generating a more profitable operation!


BLOCKBR Digital Assets
is a web 3.0 native fintech that brings together technological innovation and digital knowledge to transform physical assets into digital assets, in the process of tokenizing assets.

The supply of physical assets and tokenized financial assets, both current and new, is democratic and decentralized, which makes the way of investing safe, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?

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