Fund Trading

How do investment funds work? What are the different kinds of funds? How do funds generate profits? Browse Investopedia’s expert-written library to learn more.

Frequently Asked Questions
  • How do I fund a trading account?

    Many online brokers make it easy to open an account quickly and without a lot of money. Some require no initial deposit. However, you will need to fund the account from your checking, savings, or another brokerage account before you can begin trading.

  • What is hedge fund trading?

    Hedge funds are risky, actively managed investment pools whose managers use a wide range of strategies, often including buying with borrowed money and trading esoteric assets, in an effort to beat average investment returns for their clients.

  • How to start trading mutual funds?

    Trading shares in mutual funds are different from trading shares in stock. Mutual funds require minimum investments of anywhere from $1,000 to $5,000, and they only trade once a day after the markets close. Mutual fund fees can be complicated. Understanding these fees is important since they have a large impact on the performance of investments in a fund.

  • What is margin funding in trading?

    Margin funding in the context of trading is borrowed funds from a broker that is used to trade a financial asset, which forms the collateral for the loan from the broker. Leverage conferred by margin will tend to amplify both gains and losses. In the event of a loss, a margin call may require your broker to liquidate securities without prior consent.

Key Terms

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