Learn · Lessons

Know what you're holding.

Twenty-two lessons: four on reading the financial statements every company publishes, ten on the things people buy and sell (what each one is, how it makes money, how it is valued and what can go wrong), one on combining options into strategies, three on things that happen in markets and why, and four on reading the signals traders watch. Story first, math second, and a chart in every lesson you can move yourself. Start anywhere.

Reading the numbers

The three financial statements every public company publishes, and how they fit together.

The income statementThe score for the year: revenue down to net income, and the margins. The balance sheetA snapshot of one day: what it owns, what it owes, what's left. The cash flow statementFollow the money: from profit to cash, and free cash flow. How the three connectPost transactions to a live set of books and watch all three move.

Owning a business

A share of the profits, with the swings that come with it.

StocksA slice of the business: dividends, price gains and what a share is worth. REITsThe landlord's share: rent to dividends, cap rates and interest rates.

Lending

Fixed payments, and the risks hiding in them.

BondsCoupons, the price-and-yield seesaw, duration and credit. Cash and T-billsSavings, T-bills, money market funds and GICs, and the cost of inflation. Preferred sharesA fixed dividend, ahead of the common shares, behind the lenders.

Funds

Many holdings in one, for a fee.

ETFsThe whole table in one bet, and what a small fee costs over decades. Mutual fundsThe pooled pot, priced once a day, and the skill its fees demand.

Contracts and coins

Bets on prices, with leverage or without an anchor.

FuturesLock the price, settle every day: margin, leverage and fair value. OptionsThe right, not the obligation: payoffs, time value and Black-Scholes. Options strategiesSpreads, straddles, butterflies, condors, calendars and collars, and a builder to try them. CryptoA market that never closes, and five years of real swings.

How markets move

Things that happen in markets, why they happen, and what they do to everything connected.

Market cap and dilutionNew shares, buybacks and splits: who gains, who pays. Contango and backwardationWhy later costs more, or less, and what the roll does to holders. Rate hikes and cutsOne overnight rate, and how it moves bonds, stocks, mortgages and savings.

Reading the market

The signals traders watch, what each one measures, and how much to trust it.

The FOMCTwelve votes, one rate: the meeting, the statement, the dots and the odds. The VIXThe price of protection, and the move the options are pricing. Futures as a dashboardStocks, bonds, oil, gold and the dollar before the open. Options positioningDealer hedging, gamma and expiry, and which readings hold up.

Words you meet along the way are in Table Talk, our finance glossary.