In stock market trading, the term “certificate” refers to certain types of derivatives.

An investor holding a certificate participates in the development of its underlying asset, which could be a security, and index or another financial product.

Certificates are “bearer” securities. Unlike registered securities like investments in investment funds, certificate holders are not protected from possible payment defaults on the part of the issuer, so the investor bears a certain amount of risk.

Looking for affordable certificate brokers? Go to the online trading comparison.

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