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

Explore Fund Trading

two businessmen looking over papers containing charts
Fund Flow: Definition, Example, and How To Interpret
Bond Funds vs. Direct Bond Investing
5 Best Short-Term Bond Funds for 2020
Businessman using laptop for analyzing data stock market, forex trading graph, stock exchange trading online, financial investment concept. All on laptop screen are design up.
What Is a Bond Fund? How It Works, Benefits, Taxes, and Types
Rising coins overlaid with charts and graphs
4 Top Dividend-Paying Stock Funds
Business People Working In Office
Short-Term Investment Fund (STIF)
Glasses and glass sphere on table
Economic and Social Stabilization Fund (Chile)
Gender Equality: A Potential Driver for ESG Funds
Abu Dhabi Skyline Waterfront
Abu Dhabi Investment Council (ADIC)
Stock exchange
How AQR Places Bets Against Beta
Hybrid Fund: Meaning and Examples of Mixed Asset Class Funds
Pula Fund
Pula Fund
Where Do Most Fund Managers Obtain Market Information?
Public Investment Fund of Saudi Arabia: Definition and How Much
Can You Place a Stop-Loss Order on a Mutual Fund?
Stock market numbers and graph
Prop Shop
Zacks Lifecycle Indices
Cropped Image Of Man Checking Stock Market On Mobile Phone
Performance-Based Index
S&P Global Broad Market Index (BMI)
Hands holding a smartphone with stock trading information on the screen
What Is Direct Indexing? How It Works, Benefits, and Downsides
Where Can I Find Historical Stock/Index Quotes?
S&P 500 vs. Russell 2000 ETF: What's the Difference?
Blue double exposure of money coins stacking with bar graph for financial and investment business concept
Does the S&P 500 Index Include Dividends?
A History of the S&P 500 Dividend Yield
Business News Stock Charts from Newspaper
Dow Jones: What It Is and Why It's Important in Stock Investing
Midsection of Businessman Talking Over Smart Phone While Working at Desk in Office
Closed-End Funds vs. Open-End Funds: What's the Difference?
DJIA 101: How Does the Dow Jones Work?
Hand Holding Smart Phone Displaying Stock Market Data
Capitalization-Weighted Index: Definition, Calculation, Example
Semi truck passing in front of a mound of newly-mined coal
What Is the Baltic Dry Index (BDI), and Why Is It Important?
close up of a digital stock market graph with prices
Credit Default Swap Index (CDX): What It Is and How It Works
What Is an Index? Examples, How It's Used, and How to Invest
Hand arranging wood block stacking as step stair with arrow up. Ladder career path concept for business growth success process
Profitability Index (PI): Definition, Components, and Formula
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background.
What Does the S&P 500 Index Measure and How Is It Calculated?
John Bogle Expounds
John Bogle Reading List: 5 Books by the Father of Index Funds
Close up of female accountant or banker making calculations. Savings, finances and economy concept
Total Return Index: Definition, Example, Vs. Price Index
3 ETFs to Invest Globally
Financial Stock Market Graph
Weighted Average Market Capitalization
Stock Exchange
Where Can I Find the P/E Ratios for the Dow and S&P 500?
Display stock numbers and shanghai skyline background.
The Best ETFs for the Shanghai Composite Index
Two females looking at a tablet in an Arabic setting
The S&P 500: The Index You Need to Know
Can You Buy Shares in the Dow Jones Industrial Average (DJIA)?
What Is the Russell 1000 Index? Definition, Holdings, and Returns
The iTraxx LevX Indexes
Graph With ETF on the Laptop Keyboard With Trade Workstation App on the Screen
Why Can You Short Sell an ETF but Not an Index Fund?
What Does the Nasdaq Composite Index Measure?
Top S&P 500 Index Funds
S&P 500 vs. Russell 1000: What's the Difference?
5 Reasons to Avoid Index Funds
Korean Composite Stock Price Indexes (KOSPI)
NASDAQ Global Market Composite
Midsection View of Businessmen Analyzing Charts on Laptop in Office
Russell 3000 Index: Definition, Purpose, and Limitations
Mutual Funds vs. Money Market Funds: What's the Difference?
Stocks on Cell Phone
Passive Investing
What are some of the best small-cap index funds?
Diagrams outlined over hands and a laptop
Is it Possible to Invest in an Index?
Enhanced Index Fund (EIF)
Investment stock market
The 5 Best Hedges for a Drop in the S&P 500
Understanding and Playing the Dow Jones Industrial Average
Certificate of Deposit Index (CODI)
Investing in an index: overview, examples, and FAQ
Introduction To Fundamentally Weighted Index Investing