What Makes L&I Different From Everything Else You’ve Traded?

Stocks are the instrument most investors start with, and the one everything else is implicitly compared to.

When you buy a stock, you own a share of a company. Your return depends on what happens to that company — its earnings, its growth, market sentiment around it. You can hold a stock for a day or for twenty years. Your maximum loss is limited to the amount you invested.

Who reaches for stocks

Investors building long-term wealth through ownership in companies they believe in, or traders taking shorter-term positions around company-specific events such as earnings announcements or product launches.

Comparing stocks and Leveraged & Inverse Products

Stocks provide ownership in an individual company, whereas Leveraged & Inverse Products provide exposure to the daily performance of a market index. Unlike stocks, Leveraged & Inverse Products are designed to achieve a stated daily investment objective. Holding them over longer periods may produce performance that differs from what some investors expect, as returns over periods longer than one day are influenced by the daily reset mechanism.

What they share

Both are exchange-traded instruments with no expiry date and no margin call risk. In both cases, the maximum loss is generally limited to the amount invested.

Exchange-traded funds (ETFs) are the closest structural relative to Leveraged & Inverse Products, making them a natural starting point for understanding this category.

Both are exchange-traded products that track an underlying index. The key difference lies in the investment objective each product is designed to achieve.

An ETF aims to provide broad market exposure by tracking the performance of an index. When the index rises or falls, a traditional ETF generally moves in the same direction by a similar magnitude. Like stocks, ETFs are listed on an exchange and can be traded through a single NOVA account.

Who reaches for ETFs

Investors seeking diversified exposure to a market, sector or theme without selecting individual companies, often as part of a longer-term investment strategy.

Comparing ETFs and Leveraged & Inverse Products

The objectives are fundamentally different. A traditional ETF seeks to track an index’s performance over time. Leveraged & Inverse Products seek to deliver a stated multiple or inverse of an index’s daily return before resetting for the next trading day. As a result, returns over periods longer than one day may differ materially from simply applying the leverage multiple to the index’s cumulative return.

What they share

Both are exchange-traded products with no expiry date, no borrowing requirement and are accessible through the same NOVA account.

Forex trading involves buying one currency and selling another simultaneously — you’re expressing a view on the relative strength of two currencies, not a single asset or market index.

Forex is typically traded with significant leverage — meaning a small move in the exchange rate can produce a large gain or loss relative to your margin deposit. It operates 24 hours a day across global markets and is highly sensitive to macroeconomic data, central bank decisions, and geopolitical events. On NOVA, forex is accessible from the same account you use for equities and ETFs.

Who reaches for forex

Traders who want to capitalise on short-term movements between currency pairs — often triggered by macro events like central bank rate decisions, inflation data releases, or geopolitical shifts — and who are comfortable managing positions against a margin deposit. Forex suits traders who follow global macro developments closely and want a liquid, round-the-clock market to express those views.

Comparing forex and Leveraged & Inverse Products

Forex trading involves trading one currency against another using a margin-based structure. Leveraged & Inverse Products, by contrast, are exchange-traded products that provide exposure to the daily performance of a market index. The maximum amount an investor can generally lose in a Leveraged & Inverse Product is limited to the amount invested, and there are no margin calls. Forex positions, however, may be subject to margin calls or forced liquidation if margin requirements are no longer met.

What they share

Both are commonly used to express short-term market views and can be influenced by macroeconomic developments. Active monitoring is generally important for both.

Contracts for Difference (CFDs) are derivatives that let you speculate on the price movement of an asset without owning it. You can go long or short across a wide range of underlying assets — indices, commodities, individual stocks — with leverage.

CFDs are flexible but structurally complex. They involve financing costs for overnight positions, margin requirements, and the possibility of losses exceeding your initial deposit if the market moves sharply against you. On NOVA, CFDs are accessible from the same account you use for all other instruments.

Who reaches for CFDs

Traders who want capital efficiency — the ability to take a large market position with a relatively small upfront deposit — and who need the flexibility to go long or short across a wide range of assets from a single platform. CFD traders are typically comfortable with margin mechanics and active position management, and value the breadth of markets accessible through one instrument type.

Comparing CFDs and Leveraged & Inverse Products

Both can be used to express bullish or bearish views on a market. However, they are structured differently.

CFDs use a margin-based framework that may involve overnight financing charges and margin calls. Leveraged & Inverse Products are exchange-traded products that do not involve margin calls or overnight financing charges in the same way.

Rather than one replacing the other, each product is designed around different investment objectives and risk considerations.

What they share

Both can be used to express short-term bullish or bearish views on market indices, generally require active position management, and are available through the same NOVA account.

Futures contracts obligate the buyer to purchase, and the seller to sell, an asset at a predetermined price on a future date. They are used widely by institutional investors and sophisticated retail traders to hedge existing exposure or speculate on the direction of commodities, indices, and interest rates.

Futures require significant margin deposits and active management of contract expiry and rollover — when one contract expires, the position must be rolled into the next, incurring costs and requiring deliberate action. On NOVA, futures are accessible from the same single account as all other instruments.

Who reaches for futures

Institutional investors and sophisticated retail traders who want to hedge an existing portfolio or take a precise, large-scale directional position on commodities, interest rates, or market indices — and who are comfortable managing contract expiry, rollover costs, and margin requirements. Futures suit traders who need the depth and liquidity of a professional market and are equipped to manage the mechanics that come with it.

Comparing futures and Leveraged & Inverse Products

Futures are exchange-traded derivative contracts with fixed expiry dates, margin requirements and rollover considerations. Leveraged & Inverse Products are exchange-traded products without contract expiry or rollover requirements.

These structural differences mean the two products are designed for different trading approaches and investment objectives.

What they share

Both can be used to express directional views on broad market indices and are generally used by investors actively monitoring their positions.

Options give the buyer the right, but not the obligation, to buy or sell an asset at a specific price before a specific date. They are among the most flexible instruments available — usable for hedging, speculation, or income generation — but they require internalising a distinct set of concepts: strike price, expiry, premium, delta, theta, and others.

Options have a defined maximum loss for the buyer — limited to the premium paid. But their pricing behaviour is more complex than most other instruments, and an option’s value decays over time as expiry approaches, even if the underlying asset hasn’t moved.

Who reaches for options

Traders who want precise control over their risk and reward profile — including the ability to benefit from volatility itself, not just market direction. Options suit investors who need surgical precision: the ability to define exactly how much they risk, at what price level, and over what timeframe. They are also used by longer-term investors to generate income on existing holdings or to hedge against specific downside scenarios.

Comparing options and Leveraged & Inverse Products

Both are exchange-traded instruments where the buyer’s maximum loss is defined upfront — the premium paid for an option, or the capital invested in a Leveraged & Inverse Product.

What they share

Both are exchange-traded instruments with defined maximum loss for buyers and no margin call risk. Both also have characteristics that can materially affect performance over time — options through time decay, and Leveraged & Inverse Products through the effects of daily resetting.