Growing Wealth Archives

Jul

2025

Understanding the Greeks in Options Trading

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Table of Contents

A Quick Look at Options
What Are Option Greeks?
5 Main Options Greeks: Overview
Other Options Terminology to Know
FAQ

The “Greeks” in options trading — including delta, gamma, theta, vega, and rho — are metrics that help traders gauge the pricing and risk of a given options contract.

Because options are derivatives, the value of each contract — the premium — depends on a complex interaction of different factors, including time to expiration, price volatility, and changes in the value of the underlying security. Each of these factors is represented by a Greek letter.

While there are several Greeks, delta, gamma, theta, vega, and rho are among the main Greeks in options trading.

Options Greeks may sound like a foreign language, but they are often essential tools for assessing whether a certain position may be profitable, since it can be difficult to understand the true value of an option.

Key Points

• Options Greeks are tools that help investors estimate how different market forces may affect the value of an options contract.

• Delta measures how much an option’s price might change in response to a $1 move in the underlying asset.

• Gamma tracks how delta itself may change as the stock price shifts, helping investors understand rate-of-change risk.

• Theta reflects time decay, showing how much value an option could lose each day as it nears expiration.

• Vega and rho measure sensitivity to implied volatility and interest rate changes, respectively, both of which can influence an option’s premium.

A Quick Look at Options

Options contracts are a type of investment that can typically be bought and sold much like stocks and bonds. But options are derivatives — that is, they do not represent ownership of the underlying asset. Instead, their value (or lack thereof) derives from another underlying asset, typically a specific stock.

Traders generally conduct different types of options trading when they anticipate that stock prices may go up (a call) or down (a put). They also use options to hedge or offset potential investment risks on other assets in their portfolio.

In a nutshell, options are typically purchased through an investment broker. Those options give purchasers the right, but not the obligation, to buy or sell a security at a later date and specific price. Investors can buy an option for a price, called a premium, and then they may choose to buy or sell that option.

So, while an option itself is a derivative of another investment, it may gain or lose value, too. For example, if an investor were to buy a call option on Stock A and the stock price increases, the value of that call option may rise as well.

But the opposite would be true if an investor purchased a put option on Stock A, anticipating that Stock A’s price would go down. While not identical to shorting a stock, buying a put may result in a loss if the stock price rises instead of falls.

What Are Option Greeks?

Options traders use these letters to evaluate their option positions and better understand how changes in market conditions may affect those positions.

In short, the Greeks look at different factors that may influence the price of an option. Calculating the Greeks isn’t an exact science. Traders use a variety of formulas, typically based on mathematical pricing models. Because of that, these measurements are theoretical in nature.

Here’s a look at the most common Greeks used by traders to estimate how options might respond to market changes.

Recommended: Options Trading Terms You Need to Know

Delta

Delta measures how much an option’s price may change if the underlying stock’s price changes. It’s usually expressed as a decimal, ranging from 0.00 to 1.00 for calls and 0.00 to -1.00 for puts.

So, if an option has a delta of 0.50, in theory, that means that the option’s price may move approximately $0.50 for every $1 move in the stock’s price. Another way to think of delta is that it gives an investor an idea of the probability that the option may expire in-the-money. If delta is 0.50, for example, that can equate to a 50% chance that an option will expire in the money — meaning the strike price would be favorable relative to the market price at expiration.

Gamma

The second Greek, gamma, tracks the sensitivity of an option’s delta to changes in the underlying asset’s price. If delta measures how an option’s price changes in relation to a stock’s price, then gamma measures how delta itself may change in response to changes in the stock’s price.

Think of an option as a car going down the highway. The car’s speed represents delta, and acceleration reflects gamma, as it measures the change in speed. Gamma is also typically expressed as a decimal. If delta increases from 0.50 to 0.60, then gamma would be 0.10.

Theta

Theta measures an option’s sensitivity to time. It gives investors a sense of how much an option’s price may decline as it approaches expiration.

Similar to the “car on a highway” analogy, it may be useful to think of an option as an ice cube on a countertop. The ice cube melts — representing the diminishing time value — and that melting may accelerate as expiration approaches.

Theta is typically expressed as a negative decimal, representing the estimated daily dollar loss per share and represents how much value an option may lose each day as it approaches expiration.

💡 Quick Tip: The best stock trading platform? That’s a personal preference, of course. Generally speaking, though, an effective platform is one with an intuitive interface and powerful features to help make trades quickly and easily.

Vega

Finally, vega in options is a measure of an option’s sensitivity to implied volatility.

Markets are volatile, and securities (and their derivatives) are subject to that volatility. Vega measures how sensitive an option’s price is to changes in implied volatility.

Volatility refers to the magnitude and frequency of price fluctuations in a security’s value. Because future volatility is unknown, options pricing reflects market expectations — known as implied volatility. Changes in stock volatility can affect an option’s value, particularly when implied volatility deviates from expectations. Vega does not measure volatility itself, but an option’s sensitivity to volatility changes.

Vega is expressed as a number, reflecting the estimated dollar change in an option’s price for each 1% change in implied volatility.

Rho

Rho measures an option’s sensitivity to changes in interest rates. Specifically, it estimates how much an option’s price may move in response to a one percentage-point change in the risk free-interest rate.

The value of rho is typically small and more impactful for longer-dated options. For example, a rho of 0.05 suggests the option’s premium may increase by $0.05 if interest rates rise by 1%.

Although rho is less influential than other Greeks in most short-term trading strategies, it becomes more relevant when interest rates are rising or when a trader holds options with longer expirations.

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5 Main Options Greeks: Overview

In summary, here’s how an investor may use this data when analyzing the risk and reward of an options contract.

Name	Symbol	Definition	How investors might think about it
Delta	∆	Measures the sensitivity of an option’s price to a change in the price of the underlying security.	For example, if the delta is 0.50, that suggests the option’s price may move approximately $0.50 for every $1 move in the stock’s price. It can also indicate a 50% chance that an option may be in the money at the moment. This probability may change over time and isn’t a guarantee.
Gamma	γ	Measures the rate of change for delta. It tells you how quickly delta will change as the stock price changes.	Think of an option as a car on the highway: speed reflects delta while acceleration represents gamma, which is typically expressed as a decimal. A stock trading at $10 with a delta of 0.40 and gamma of 0.10 means that a $1.00 increase in the stock’s price may adjust delta by 0.10, increasing it to 0.50. A $1 decrease may lower delta to 0.30, impacting how quickly the option’s value will increase or decrease with further price movements.
Theta	θ	Measures the sensitivity of an option’s price to the passage of time.	An option’s theta is like an ice cube melting on a countertop – its time value diminishes as expiration approaches, and the melting becomes more rapid over time. This is expressed as a negative decimal that reflects dollar loss. For example, a theta of -1 means the option may lose $1 per share, per day, until it reaches the expiration date.
Vega	ν	The change in an option’s value as implied volatility goes up or down by 1 percent.	Vega rises with higher implied volatility, which reflects greater market uncertainty. Lower implied volatility typically corresponds with smaller price movements.
Rho	ρ	Measures the sensitivity of an option’s price to a change in interest rates.	If an option has a rho of 1.0, a 1% increase in interest rates may result in a 1% increase in the option’s value. Options most sensitive to interest rate changes are typically those that are at-the-money or have the longest time to expiration.

Other Options Terminology to Know

The specific option traded (a call versus a put, for example) and the underlying stock’s performance determine whether an investor’s position is profitable. That brings us to a few other key options terms that are important to know:

In the Money

A call option is “in the money” when the strike price is below the market price. A put option is “in the money” when the strike price is above the market price.

Out of the Money

A call option is “out of the money” when the strike price is above the market price. A put option is “out of the money” when the strike price is below the market price.

At the Money

The option’s strike price is the same as the stock’s market price.

The Takeaway

There’s no getting around it: Options and the Greeks can be complex and are generally not appropriate for newer investors. But experienced traders, or those willing to spend time learning how options work, may find them to be a valuable tool when building an investment strategy.

SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.

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Explore SoFi’s user-friendly options trading platform.

FAQ

What are the Greeks in options trading?

The Greeks are a set of theoretical risk measures used to estimate how an option’s price may change based on variables like time, volatility, and the underlying asset’s price. The most commonly referenced Greeks are delta, gamma, theta, vega, and rho.

What is the Rule of 16 in options?

The Rule of 16 is shorthand for estimating expected daily price movement. It’s based on the idea that implied volatility reflects annualized moves. By dividing implied volatility by 16, traders can estimate the expected one-day standard deviation for a stock.

How do you use gamma in options trading?

Gamma helps traders get a sense of how stable an option’s delta is. A higher gamma suggests delta could change rapidly, especially near expiration or when an option is at the money. Monitoring gamma can help manage risk when holding positions that are sensitive to price swings.

Which Greek is most important in options trading?

The most closely watched Greek is delta, which estimates how much an option’s price may change when the underlying asset moves by $1. Delta also gives a rough idea of an option’s probability of expiring in the money. That said, the “most important” Greek depends on the strategy: traders focused on time decay may prioritize theta, while volatility traders may focus more on vega.

Photo credit: iStock/photolas

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q225-068

Jul

2025

What Is a Carry Trade in Currency Markets?

What Is A Currency Carry Trade in Forex Markets?

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is a Currency Carry Trade?
How Do You Execute a Carry Trade?
Is a Carry Trade Risky?
FAQ

A currency carry trade is a popular type of forex trade, whereby an investor borrows in a low-interest currency in order to invest in a currency with a higher rate.

Putting on a carry trade is one way to take advantage of discrepancies between the interest rates of different currencies, particularly if the investor uses leverage.

This strategy can be risky, however, owing to the fact that interest rates, and currency values, can fluctuate at any time. The use of leverage adds additional risk, if the trade moves in the wrong direction.

Key Points

• A currency carry trade involves borrowing funds in a low-rate currency and investing in assets in a higher-yielding currency.

• Thus, a currency carry trade is a way to profit from differences in interest rates.

• This is a popular forex strategy, owing to its relative simplicity: An investor just needs to find the appropriate currency pair to execute the carry trade.

• Because interest rate differentials may be small, some investors use leverage to maximize potential gains.

• The risk of loss is high, however, if interest rates suddenly change.

🛈 While SoFi offers exposure to foreign currencies through its alternative investment funds, it does not offer forex trading at this time.

What Is a Currency Carry Trade?

In a carry trade, forex traders borrow money at a low interest rate in order to invest in a currency where they can buy an asset with a higher rate of return. In the forex markets, a carry trade is a bet that one foreign currency will hold or increase its value relative to another currency, and that interest rates will also remain steady.

Of course, this active investing strategy hinges on whether or not interest rates and exchange rates are in the investor’s favor. The wider the interest rate spread between two currencies, the better the potential returns for the investor.

Even in cases with a relatively small rate differential, though, investors who use this strategy often employ leverage to maximize potential profits.

How Do You Execute a Carry Trade?

A carry trade strategy can be a relatively simple way to increase an investor’s returns, assuming they can find a currency with a higher rate and one with a lower rate, and that exchange rates between the two currencies remain relatively stable. In that way, it’s similar to understanding “spread trading” as it relates to stocks.

Currency Carry Trade Basics

Imagine that U.S. interest rates are at 5%, but the interest rate in Japan is 1% — a 4% spread. The yen would be considered the funding currency for the carry trade because the rate is lower, and the dollar is the asset currency (which typically has a higher rate).

A trader could borrow 1 million yen at 1%, and buy an asset such as a U.S. bond that has a 4% yield. When the bond matures, the investor could collect the bond yield, repay the yen they borrowed at 1%, and pocket the difference.

There is a wild card here, though, which is that both interest rates and currency values can change — sometimes suddenly — which can cause the trade to move in the wrong direction.

Here is an example of how the exchange rate and interest rate come into play in a currency carry trade.

Carry Trade Example

In this example the investor will borrow 1 million yen at 1%, and an exchange rate of 145 yen to the dollar.

1 million yen / 145 = $6,896.55

The investor could take the $6,896.55 and invest in a U.S. security that pays 4%, and collect that amount after a year.

$6,896.55 x $0.04 = $275.86

Total = $7,172.41

Now the investor has to repay the 1 million yen they borrowed at 1%, for a total of 1,000,100 yen, or $6,897.24
They subtract the principal from the ending balance in dollars:

$7,172.41 – $6,897.24 = $275.17

The resulting profit of $275.17 is 4% of the original spread between the interest rate spread of the two currencies.

Recommended: What Is Forex Trading?

Is a Carry Trade Risky?

The concept of a carry trade is simple, but in practice, it can involve investment risk.

In the above example, neither the exchange rate nor the interest rates moved — which in real life is highly unlikely.

Most notably, there’s the risk that the currency or asset a trader is investing in (the British pounds in our previous example) could lose value. That could put a damper on a trader’s expected returns, as it would eat away at the gains the difference in interest rates could provide.

Currency prices tend to be very volatile, and something as mundane as a monthly jobs report released by a government can cause big price changes.

Given the risks, carry trades in the currency markets may not be the most appropriate strategy for investors with a low tolerance for risk.

The Takeaway

Using a currency carry trade strategy is a popular one in the forex markets because it’s relatively easy to find currency pairs with an interest rate difference that can be exploited for a potential gain. The risk, though, lies in the potential for currency rates to shift, as well as interest rates.

FAQ

How does a carry trade work?

A currency carry trade works when two currencies are relatively stable, but one offers a much lower rate than the other. This makes it possible to borrow the funding currency to invest in a higher-yield security in the asset currency, and pocket the difference, minus the interest rate owed on the principal borrowed.

What happens when a carry trade moves in the wrong direction?

There are various risk factors when using a carry trade strategy. One is that the lower-rate currency could strengthen against the asset currency, and the investor would effectively repay a larger amount than they borrowed, thus cutting into any profit.

What is the forex market?

The forex market is where financial institutions, as well as individual investors, trade foreign currencies. The forex market is the largest in the world, and it’s possible to trade 24/7 — which is different from most markets, which have open and close hours.

Photo credit: iStock/akinbostanci

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q225-099

Jul

2025

7 Life Events You Should Financially Prepare For

By Susan Guillory | Budgeting & Goals, Growing Wealth, Life & Career | Comments Off

Table of Contents

1. Your First Job
2. Paying Off Student Loans
3. Buying a Car
4. Buying a Home
5. Changing Jobs
6. Saving for Your Kids’ College
7. Retirement
FAQ

From snagging that first real job to starting a family (congrats all around), life is full of important rites of passage. These events are meaningful, for sure, and they can also impact the path of your personal finances.

As you take control of your money, it can be wise to think about and plan for these key transitions. That way, you can be better prepared for how they may alter your financial health.

In this guide, you’ll learn about seven major milestones plus advice on navigating these life events successfully so you can build wealth today and tomorrow.

Key Points

• Prepare for major life events with smart goal setting, budgeting, and financial management.

• Start your first job by budgeting, saving for emergencies, and enrolling in a 401(k).

• Pay off student loans faster by overpaying and refinancing to lower interest rates.

• For car buying, save a down payment and research to stay within your budget. When purchasing a home, determine affordability and save a down payment.

• Plan for retirement early, utilizing tax-advantaged accounts and consistent savings.

1. Your First Job

You’ve finished your education (for now, at least) and are starting your first job. This is where your financial journey really begins. And, since you are likely earning more money than you ever have, it’s important to have a plan for how you will use that money wisely.

If your employer offers a 401(k) for retirement, you may want to consider having at least some money taken out of each paycheck each cycle and put into this fund.

Once you get your first paycheck, you can see exactly how much money you are taking home (after all deductions, including retirement, and taxes are taken out). This can be a perfect moment to make a simple budget. This will help you get the most out of your salary and build some financial stability.

• This involves listing all of your essential monthly expenses. You can think of these as the “needs” in life, such as housing, food, and minimum payments on debts or loans.

• Then subtract them from your monthly take-home pay to see how much you have left over to play with (the “wants” in life) and, of course, to save.

• Saving can be crucial, so it’s wise to determine an amount you can set aside each month into a separate savings account. It’s perfectly fine to start small. Even putting a little bit of money aside each month will start to add up over time.

• This savings account can help you build an emergency fund (generally three to six months’ worth of living expenses). Having financial back-up can help to ensure that if you should have a large, unexpected expense, you could cover it without having to rely on high interest credit cards.

• Once you have a comfortable emergency fund, you may then want to start working on other savings for other goals, such as buying a car or other major item you are hoping to buy in the next few months or years.

If you are looking for guidance on how to establish a budget that works for you, consider the 50/30/20 budget rule. This guideline says that, of your take-home pay, you should allocate 50% towards “needs,” 30% towards “wants,” and 20% to savings.

Recommended: 50/30/20 Budget Calculator

2. Paying Off Student Loans

Student loan payments can be a drag on your monthly budget, especially if you are trying to save toward other financial goals, like buying a home or paying for your kids’ college education.

One of the best ways to pay off student loans is to pay more than the minimum each month. The more you pay toward your loans, the less interest you’ll owe — and the quicker the balance will disappear.

There’s typically no penalty for paying student loans early or paying more than the minimum. However, there is a caveat with prepayment: Student loan servicers, which collect your bill, may apply the extra amount to the next month’s payment.

The problem with that is that it advances your due date, but it won’t help you pay off student loans faster. That’s why it can be a good idea to tell your servicer (whether online, by phone or by mail) to apply overpayments to your current balance, and to keep next month’s due date as planned.

Another option you may want to look into refinancing your student loans. This could help you pay off student loans sooner without making extra payments.

Refinancing replaces multiple student loans with a single private loan, ideally at a lower interest rate. To speed up repayment, it can be a good idea to choose a new loan term that’s less than what’s left on your current loans.

Keep in mind, however, when you refinance a federal student loan into a private loan, however, you may extend the term, which means paying more interest over the life of the loan. Also, you may lose the benefits and protections that come with a federal loan, like deferment and public service-based loan forgiveness.

3. Buying a Car

Buying your first car can be an exciting experience. And, you might want to rush to the nearest dealer and purchase a shiny, new model right away.

However, saving up for a vehicle before you buy minimizes the amount you have to borrow to buy a car and can save you a substantial amount in interest.

To get a sense of how much you need to save for a down payment, you can research some car makes and models that might suit you and get a sense of prices for both new and used cars.

You can then zero in on a price range you can afford and calculate the down payment. Deciding between a new vs. used car? A good rule of thumb is to put 20% down on a new vehicle and 10% down on a used one.

Making a higher down payment helps you qualify for a loan, and it can earn you a lower interest rate and result in more affordable monthly payments.

Once you know how much to save, the next step is to find a good place to start saving. Good options include: a money market account, online savings account (which typically offer higher interest rates), or checking and savings account.

These accounts can enable you to earn more interest than a standard checking account but allow you to access the money when you are ready to buy that car.

4. Buying a Home

For many people, buying a home is the biggest purchase they will ever make. So, it’s important to prepare for it.

A great first step is to figure out how much house you can afford to buy. You can come up with a target price range based on the area you want to live in, details about the type of home you want, and how much you’re comfortable spending on a monthly mortgage payment.

This exercise will help you understand how much you need to save and roughly how long it will take you to save enough.

Mortgage lenders and online mortgage calculators can also help you decide the absolute maximum you can afford to spend on your house.

One common rule of thumb is that your home payment (including loan payment, property taxes and homeowners insurance) should take up no more than a third of gross pay (your monthly paycheck amount before taxes and deductions are taken out). However, this can vary depending on the cost of housing in your area.

Once you have a target home price, you can start saving for a down payment. Many mortgage lenders prefer you to make an upfront deposit of up to 20% of your home’s cost. However, there are mortgages available for those who put down significantly less (even zero).

If you are saving for a down payment, you can think about when you want to buy a home and then work backwards to determine how much you need to save each month to reach this goal. You might see what interest rates you can earn at an online bank vs. a traditional bank. They typically offer higher returns and lower (or no) fees.

5. Changing Jobs

At some point during your career, you may change jobs. Generally, this can be a smart financial and professional move, but changing jobs is still something you’ll want to plan for financially. Some tips to help your money work harder for you:

• You’ll likely be eligible for a new set of employee benefits, including health insurance. However, it will probably be up to you to ensure that you have health coverage during the transition. To avoid any gaps, it’s a good idea to ask your new employer how soon you will be able to qualify for healthcare.

• You may also want to create a plan for transferring your 401(k) and health savings account (HSA) to your new accounts. Rolling them over is generally a simple process, but you may want to contact your previous employer for guidance.

• An FSA vs. an HSA can require a different approach. If you have a flexible spending account (FSA), you may need to submit all eligible expenses for reimbursement under your old program before you leave your current job. It can be a good idea to check with your company’s HR department to find out whether or not you have a grace period for submission.

Since you may be earning a higher salary, you may also want to re-examine your budget, and perhaps do some tweaking, such as funneling a bit more money into your retirement fund and/or savings account each month.

6. Saving for Your Kids’ College

Next to buying a home, child education expenses are among the biggest you may have in your lifetime. Just like retirement: it’s never too early to start saving for college. But even if you put it off, you can still help cover most or all of those college costs with wise saving and investing.

While predicting how much college will be for a kindergartener may be difficult, it gets a little easier the older your kids get. However, you can find current college costs and predictors for future college tuition costs online and use that as a benchmark for your savings.

One great place to start building education savings is in a 529 college savings plan. These are savings plans, usually sponsored by state governments, that encourage saving for future education costs.

They are often tax-friendly, in that many states will let you deduct your contribution from your state income tax. Even better, when you withdraw the money for college, the money will not be federally taxed.

That means, any growth (or money in the account that you didn’t put in) is not taxed, which can be a significant advantage over traditional investment accounts.

You can put money into your own state’s 529 or any other state’s plan. Whatever you choose, consider automating your finances, so that your bank transfers the money right into the 529 on the same day each month.

One way to ease saving for college is to use smaller life transitions to help fund your education savings plan. When your child no longer needs daycare or preschool, for example, you could funnel what you were paying for that into your account.

7. Retirement

Retirement may seem far away, but it can come up faster than you expect and, if you’re unprepared, you may struggle financially. Saving for retirement early can provide peace of mind later.

And, the earlier you start saving for retirement, the less you’ll actually have to put away, thanks to the magic compounding interest (which means the interest you earn on your investments also earns interest).

While it can seem impossible to predict how much money you’ll need once you retire, some financial experts recommend this rule of thumb: Aim to save at least 15% of your pretax income each year from age 25 onward. If you start later, you would want to up those percentages.

Fortunately you can get Uncle Sam to help. By contributing to tax-advantaged savings accounts like traditional 401(k)s and individual retirement accounts (IRAs), your contributions are made before taxes, reducing your current taxable income.

That means you get a tax break the year you contribute. Plus, that money can grow tax-free until you withdraw it in retirement, when it will be taxed as ordinary income (and at retirement time, you may be in a lower tax bracket).

With Roth 401(k)s and IRAs, your contributions are after tax, but you can withdraw the money tax-free in retirement (assuming certain conditions are met).

If you are contributing to 401(k) at work and your employer offers matching funds, you may want to increase your automatic contributions at least to that level. This is effectively “free” money.

The Takeaway

Throughout your life you will likely experience some significant events and milestones that can have a major impact on your financial well-being. These include buying a home, saving for your child’s education, and stashing money away for your retirement. The better prepared you are for these transitions, the less stressful and more enjoyable they can be. Part of that preparation can mean finding the right banking partner.

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FAQ

How to financially prepare for life?

Some important ways to financially prepare for life include budgeting wisely, setting money goals, accruing an emergency fund, managing debt and credit responsibly, and planning for long-term goals like saving for your child’s education or for your retirement.

What are examples of life events?

Life events are major moments that can impact the path of your life. They include such things as moving to a new location, getting married, having a child, starting a new job, losing a job, divorce, illness, death of a loved one, and embarking on retirement, among others. Often, these events require smart money management.

What is the 1234 financial rule?

The 1234 financial rule is a ratio for budgeting: It says 40% of your income should go to non-housing expenses, 30% to housing, 20% to savings, and 10% toward insurance premiums.

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See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-081

Jul

2025

The Challenges of Modern Day Investing

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is Modern Investing?
Key Characteristics of Modern Investing
Shifts in Young Adults’ Investing Strategies
What Are Challenges Facing Investors Today?
Strategies for Adapting to Today’s Changing Landscape
FAQ

Modern investing presents an interesting dichotomy: While it’s easier than ever to access the markets, navigating them has gotten increasingly complex. Thanks to a wide variety of platforms and mobile apps, investors have access to buying and selling assets with a few taps — often at little or no cost. However, technology has also ushered in new risks and challenges, from too much information to misinformation to media-driven market volatility.

Below, we take a closer look at the modern investing climate, emerging trends for young adults, some pressing challenges, and some ways investors can identify strategies that align with their goals.

Key Points

• Modern investing has been simplified by technology but complicated by providing access to excessive information and advice.

• Generally, young adults tend to invest early, use AI, and favor socially-conscious investments like ESG.

• Market volatility, misinformation and scams, and a lack of personalized advice pose significant challenges for investors.

• Diversification and setting clear financial goals may help manage investment risks.

• Continuous financial education and, in some cases, professional advice can help individuals navigate the modern investment landscape.

What Is Modern Investing?

Modern investing refers to the use of current tools, technologies, and data-driven strategies to help manage and achieve financial goals. Unlike past generations, today’s investors have access to mobile devices, online investing, and AI-powered tools, allowing them to research strategies, execute trades, and track portfolios in real time.

But along with this newfound ease comes added complexity. Investors now face a torrent of information coming from both traditional media and newer, less-regulated sources like social media. Many younger investors find themselves scrolling TikTok or YouTube for investing tips — encountering influencers who may or may not be credible.

Investors also have more choices than ever before, both in terms of what they can invest in and how they can invest. This also means a greater need for education, discipline, and critical thinking to navigate the complexities of modern investing.

These conditions can make investing feel overwhelming — even discouraging some from getting started in investing at all.

Key Characteristics of Modern Investing

Let’s take a deeper look at what defines modern investing today.

Technology and Digital Platforms

Access to the markets is increasingly more straightforward. These days, almost anyone with a computer/laptop or smartphone and an internet connection can register with an online broker and start trading.

Investors have a wide range of online platforms to choose from — from traditional brokerages to fintech startups — most of which offer accessible mobile apps and research tools. These digital tools allow investors to explore and trade most securities such as stocks, bonds, mutual funds, and derivatives.

But with so many platforms, dashboards, and features available, the real challenge lies in choosing the right one — and learning how to use it effectively. For many, that means experimenting with various tools before settling on a system that fits their goals and appetite for risk.

Rise of Social Media and Influencers

Another defining feature of modern investing is the sheer volume of information available — much of it coming from nontraditional sources. While earlier generations relied on legacy financial media outlets — like The Wall Street Journal, Fortune, CNBC, Bloomberg, or The Financial Times, to name a few — today’s investors are just as likely to get their information from YouTube, Instagram, TikTok, Reddit, or X (formerly Twitter).

The democratization of financial advice can be empowering, but also potentially dangerous. Not all influencers are experts, and some may promote certain investments for personal gain or sponsorship reasons. This can cause investors to make poor decisions, including risky “FOMO trading” based on hype rather than fundamental research.

Shifts in Young Adults’ Investing Strategies

Young adults have changed their investment behaviors in recent years, largely due to the issues outlined above: They have more access to the markets, and there’s more information that may encourage them to invest.

According to the World Economic Forum’s Global Retail Investor Outlook 2024, 30% of Gen Z investors began investing while attending college or in early adulthood. That’s double the rate of Millennials (15%), and far ahead of Gen X (9%) and Baby Boomers (6%).

Gen Z and Millennials are also more comfortable using AI-based platforms, such as chatbots, to seek financial advice, with 41% saying they would trust an AI assistant to manage their portfolios. Additionally, younger investors are more likely to prioritize values-based strategies like ESG (environmental, social, and governance) investing or impact investing.

What Are Challenges Facing Investors Today?

Despite the advances and opportunities of modern investing, several challenges can derail even the most seasoned investor. Here are some potential pitfalls to keep in mind:

• Information overload: We live in the information age, but more isn’t always better. The sheer volume of financial news, stock tips, social posts, and analysis can paralyze decision-making or lead to poor choices based on partial understanding.

• Market volatility: Geopolitical tensions, economic disruptions, pandemics, and overflow of information can cause market swings that are sharp and unpredictable. Investors today generally need to be prepared for the possibility of higher volatility across different types of assets.

• Misinformation and scams: Investment information found in social media may be inaccurate, incomplete, or misleading. In some cases, scammers use various online platforms to spread false information and promote fraudulent investment schemes. Even sophisticated investors may fall prey to scams disguised as legitimate opportunities.

• Emotional investing: With real-time updates and constant connectivity, modern investors may be more susceptible to emotional decision-making, such as panic selling during dips and chasing “hot” stocks. These pitfalls can be intensified by the rapid flow of information, interactions, and transactions on digital platforms.

• Lack of personalized advice: Robo-advisors can be efficient, but they may lack the nuance of personalized financial planning. For those with unique needs or goals, this could result in less-than optimal investment strategies.

Strategies for Adapting to Today’s Changing Landscape

The following investment strategies provide options that may help a wide range of investors explore potential advantages of modern investing technology, while side-stepping some of the potential pitfalls.

• Set clear financial goals: Whether it’s retirement, buying a home, or achieving financial independence, knowing your goals can help filter out some of the noise. Ideally, you want your risk tolerance and time horizon to shape your investment choices, rather than what’s trending online.

• Diversify intelligently: Diversification remains a timeless strategy. Rather than put all your eggs in one basket, consider spreading investments across asset classes, industries, and regions. While a portfolio may primarily consist of traditional assets like stocks, bonds, and cash equivalents, it may also include a smaller portion of higher-risk assets, such as alternatives like commodities or real estate, depending on an investor’s risk tolerance, time horizon, and financial goals. Some investors seeking a simple way to diversify their portfolios may find investing in exchange traded funds (ETFs) or mutual funds offer exposure to a broad range of assets.

• Consider dollar-cost averaging (DCA): Investing a fixed amount regularly may help reduce the impact of market volatility. Over time, DCA can help build wealth steadily without trying to time the market — a difficult endeavor even for professionals.

• Stay educated and skeptical: It’s important to make a habit of continuous learning. You can do this by subscribing to trusted financial newsletters, reading books by reputable investors, and following credible financial journalists. When evaluating tips or trends online, it’s important to always verify the credentials of the source.

• Seek professional guidance: While modern investors can — and do — go it alone, professional financial advice can be invaluable to help you work towards your financial goals, especially for retirement planning, tax strategies, and estate planning. Consider hybrid investing models that combine robo-advising with human oversight for a balanced approach.

The Takeaway

Modern-day investing offers unprecedented access and convenience, but also presents new challenges. From navigating digital platforms to parsing influencer information, today’s investors need to be more informed and discerning than ever.

Ultimately, effective modern investing often comes down to education, discipline, and having a clear understanding of your goals and the reasons behind them. Starting with a basic strategy, staying consistent, and seeking professional guidance when needed can go a long way toward helping to build confidence — and a stronger financial future.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What are some investment strategies young adults may want to consider in today’s market?

Young adults seeking long-term growth potential may consider investing early and consistently. One possible strategy to consider is index funds or exchange-traded funds (ETFs), which offer diversification and are generally low cost. It’s also important to take advantage of employer-sponsored retirement accounts like 401(k)s, especially with matching contributions. Remember, though, that no investment strategy can guarantee returns or eliminate the possibility of loss.

Is modern investing really more complicated than it used to be?

In some ways, yes, but it’s also more accessible. The sheer volume of investment options, platforms, and financial tools can feel overwhelming. However, technology has simplified investing through user-friendly apps, robo-advisors, and educational resources. Compared to past generations, investors today can start with smaller amounts, trade with ease, and access global markets. The challenge lies in navigating the information overload and avoiding decision fatigue. With proper guidance, though, investing today can actually be more convenient and flexible.

What policies or changes might encourage more Americans to invest? Why?

Policies that boost financial literacy and expand access to retirement plans would likely encourage more Americans to invest. For example, encouraging employer-provided retirement savings plans and expanding access to low-cost investment platforms can make investing easier. Making financial education a core part of public schooling could potentially empower young people to start investing earlier. These changes lower barriers and increase confidence, which could help more people build wealth through consistent, long-term investing.

What can be challenging in modern investing?

The most difficult part of investing will vary from individual to individual, but common challenges in modern investing may include having too much information to parse through, wondering who you can trust, and figuring out which technology or tools to use to execute an investment strategy.

It can also be hard to stay disciplined, especially during market downturns. Emotional decision-making, like panic-selling when markets drop or chasing trends that are being hyped on social media, can hurt long-term returns.

Investors that seek long-term investment goals may want to consider developing and sticking to a plan, ignoring short-term noise, and avoiding the urge to time the market.

What does it mean to be diversified?

Being diversified means spreading your investments across different asset types, sectors, and regions, so that your portfolio isn’t overly dependent on one area’s performance. The idea is to reduce risk: If one investment performs poorly, others may perform more favorably, helping to stabilize your overall returns.

Diversification can be achieved through mutual funds, exchange-traded funds (ETFs), or by owning a mix of assets, such as domestic and international assets. Depending on your goals and tolerance for risk, diversification may provide a way to help reduce risk and build a more stable investment portfolio.

Photo credit: iStock/ArtistGNDphotography

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Dollar Cost Averaging (DCA): Dollar cost averaging is an investment strategy that involves regularly investing a fixed amount of money, regardless of market conditions. This approach can help reduce the impact of market volatility and lower the average cost per share over time. However, it does not guarantee a profit or protect against losses in declining markets. Investors should consider their financial goals, risk tolerance, and market conditions when deciding whether to use dollar cost averaging. Past performance is not indicative of future results. You should consult with a financial advisor to determine if this strategy is appropriate for your individual circumstances.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOIN-Q225-092

Jul

2025

How Much to Invest in ETFs Per Month

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Table of Contents

Understanding ETF Investment Basics
Determining Your Monthly ETF Investment Strategy
Factors That Influence Your Monthly ETF Contribution
Popular ETF Investment Strategies
Benefits of Consistent Monthly ETF Investing
FAQ

For investors who have opted to invest in exchange-traded funds, or ETFs, deciding how much to invest in ETFs each month depends on a few factors.

Many people invest a fixed amount every month based on their income (for example, 10% or 15% of their paycheck). But ultimately, choosing the right amount for you will depend on your financial situation, goals, time horizon, and risk tolerance.

Having a monthly ETF investment strategy can be useful in building a diversified portfolio, with potentially lower investment costs. Asking yourself a few questions can help you make the decision about how much to invest in ETFs every month to align with your goals.

Key Points

• Many investors choose a set amount to invest each month, and some or all of that can be invested in ETFs.

• Investing in ETFs every month can offer investors a low-cost way to have more diversification in their portfolios.

• Deciding how much to invest in ETFs every month depends on your financial situation, investing goals, time frame, and risk tolerance.

• ETFs may offer some advantages over mutual funds in that they may have lower fees and it’s possible to trade ETF shares throughout the day.

• Investing monthly in ETFs can help investors take advantage of dollar-cost averaging, which may offer some protection against risk.

Understanding ETF Investment Basics

ETFs, or exchange-traded funds, bundle different investments together. They’re similar to mutual funds, which are also a type of pooled investment, but ETFs are traded on stock exchanges throughout the day, in the same way that stocks are.

In that sense, ETFs can be more liquid than mutual fund shares, which only trade once a day. Investors can buy and sell ETFs, whether investing online or through a traditional brokerage, making them a flexible investment choice.

Advantages of ETFs

In addition, most (but not all) ETFs are passively managed, similar to index mutual funds, which track a market index like the S&P 500. Understanding the difference between ETFs and index funds is important, because although both types of funds may track an index, ETF shares can be more liquid, transparent, and tax efficient than index mutual funds.

There are also various types of ETFs that investors can choose from. For instance, there are ETFs that bundle different stocks and bonds together, others that are concentrated on energy stocks or tech stocks or green bonds. Again, this is similar to how mutual funds work — many mutual funds focus on a specific sector or investment style (e.g., stocks with a certain market capitalization).

Risks of Investing in ETFs

That said, ETFs have risks, like all other investments. Their values fluctuate with the market, for one, and there are risks that involve all of the underlying investments in each ETF — which could include credit risks, interest rate risks, industry- or sector-specific risks, and more.

As with any type of investment, it’s probably best to do your research on ETFs and the underlying investments, and any cost implications, before deciding to invest in ETFs.

Determining Your Monthly ETF Investment Strategy

Once you understand the benefits of ETFs, as well as the risks, you can decide what your monthly ETF investment strategy will be to support your financial goals.

The Power of Dollar-Cost Averaging

Investing on a regular basis, a method also known as dollar-cost averaging, can potentially help manage volatility and potential risks, especially when you’re just learning about how to start investing.

When you invest a fixed dollar amount on a steady basis (e.g. weekly or monthly), over time you end up buying more shares when prices are lower and fewer when prices are higher. This can lower the average cost per share, and (more important) help you avoid the temptation to time the market — e.g., selling when prices drop, or buying when they rise, which can increase the risk of losses.

Deciding on a Monthly Amount

Before learning how to trade ETFs, however, you have to decide how much you want to invest in exchange-traded funds, or other investments, each month.

Many investors choose a percentage of their income as a place to start. For example, a general consideration when deciding how much to save for retirement is to set aside at least 15% of your income. Other people prefer to go with a fixed dollar amount, like $200 or $500 per month. It depends on your goals and financial situation.

When investing for retirement, that could be a long-term ETF investment strategy — which is a different approach from active investing. But saving for a down payment could require a shorter-term strategy.

There’s no rule that says you have to stick with a portfolio of ETFs only, but it’s good to know that these funds are flexible enough to be used for longer- or shorter-term goals.

Factors That Influence Your Monthly ETF Contribution

Now it’s time to examine your financial goals and time horizon, your current financial situation, and your risk tolerance — as all of these will help you decide on a potential monthly ETF investment strategy.

Financial Goals and Time Horizon

Knowing your financial goals — whether that’s saving up for a big purchase, creating a long-term plan, going back to school — will help you determine a timeline that makes sense for you. Obviously, a goal like retirement could be 20 years, 30 years, or more. Knowing the time horizon for a near-term goal with a specific amount may require doing some due diligence.

For example, saving for house means researching the price for a home you can afford, knowing the down payment amount, and deciding how much you can save each month to reach that goal.

Current Financial Situation

You may want to give some serious thought to your current financial situation, which may, perhaps more than anything, dictate how much you can afford to invest on a monthly basis. Or, put another way: How much money will you be budgeting for savings, and potentially ETF investments, every month?

If you find yourself with a surplus of cash every month, because your income exceeds your expenses, then you may be able to save more consistently a monthly basis.

But even if the amount you have to invest each month is smaller than anticipated, it’s still a good idea to get started, so your money potentially has time to grow.

Risk Tolerance and Market Conditions

Finally, you may want to think about how much risk you’re able to stomach, and how the current market conditions are informing your risk appetite. This is generally referred to as risk tolerance — how much risk an investor is willing or able to assume in their portfolio.

As the saying goes, more risk, more reward — though typically, that can mean that riskier investments might generate higher returns, but with a much higher risk of loss.

When you’re thinking in terms of how much you’re able or willing to invest in ETFs every month, risk tolerance should be a big part of that calculation. It’s also an important part of selecting specific ETF investments, because some ETFs may have underlying investments that are higher risk, e.g., high volatility stocks.

Popular ETF Investment Strategies

There are a range of investing strategies ETF investors can consider:

• Buy-and-hold: Purchasing ETFs and holding on to them for many years is a classic buy-and-hold strategy that may generate returns over the long term. Although some people consider this a conservative approach, because it helps investors ride out periods of volatility, there is still the risk of loss, or holding onto an underperforming asset for too long, and missing other market opportunities.

• Thematic investing: There are thematic ETFs on the market, allowing investors to invest in specific interests (like green investing or biotechnology), or to capitalize on certain industries. This has its own risks, but it’s a strategy that could prove interesting and maybe even fun for some investors, depending on their goals.

There can be more options, such as investing in leveraged ETFs. Again, a little research is likely to shed some light on additional trading strategies that can be utilized for ETF investors.

Benefits of Consistent Monthly ETF Investing

Some potential benefits of consistent monthly investing, in ETFs or other securities, include the aforementioned advantages of dollar-cost averaging, the potential for long-term returns, and the ability to avoid emotional or knee-jerk reactions to swings in the market.

A consistent strategy can help investors stick to their plan and keep their larger goals in mind.

The Takeaway

Investing monthly in ETFs is one way to develop an investment strategy that includes principles of diversification, dollar-cost averaging, and more. There are many things that each individual investor should consider, of course, such as whether ETFs are the right investment for them, and their long-term goals and time horizon.

As far as how much an investor should try to invest in ETFs each month, that will depend on the individual investor’s specific situation, goals, and risk profile.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What is the minimum amount I should invest in ETFs each month?

There is no minimum amount an investor should invest in ETFs each month. Should an investor choose to make monthly investments in ETFs, the amount should be determined by their financial situation, goals, time horizon, and risk tolerance.

How do I choose which ETFs to invest in?

The specific ETFs investors choose to invest in are likely going to be determined by the investor’s risk tolerance and goals. ETFs differ greatly from fund to fund, and some are riskier than others — accordingly, it may be a good idea to talk things through with a financial professional.

Should I invest a lump sum or spread my ETF investments monthly?

It can be a good idea to spread your investments out over a period of time to take advantage of dollar-cost averaging. That may help smooth out the risk profile of a portfolio.

Can I automatically set up recurring monthly ETF investments?

Depending on the brokerage or platform you use to invest, it’s possible to set up automatic, recurring investments in ETFs or other securities.

How often should I rebalance my ETF portfolio?

How often you rebalance your portfolio is up to you, but generally, professionals recommend that investors consider rebalancing once or twice per year. You may want to consider rebalancing, too, if your living circumstances change.

Photo credit: iStock/matdesign24

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Dollar Cost Averaging (DCA): Dollar cost averaging is an investment strategy that involves regularly investing a fixed amount of money, regardless of market conditions. This approach can help reduce the impact of market volatility and lower the average cost per share over time. However, it does not guarantee a profit or protect against losses in declining markets. Investors should consider their financial goals, risk tolerance, and market conditions when deciding whether to use dollar cost averaging. Past performance is not indicative of future results. You should consult with a financial advisor to determine if this strategy is appropriate for your individual circumstances.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

S&P 500 Index: The S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an investment product, but a measure of U.S. equity performance. Historical performance of the S&P 500 Index does not guarantee similar results in the future. The historical return of the S&P 500 Index shown does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Fund Fees
If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

SOIN-Q225-089

Understanding the Greeks in Options Trading

A Quick Look at Options

What Are Option Greeks?

Delta

Gamma

Theta

Vega

Rho

Finally, user-friendly options trading is here.*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

5 Main Options Greeks: Overview

Other Options Terminology to Know

In the Money

Out of the Money

At the Money

The Takeaway

FAQ

What are the Greeks in options trading?

What is the Rule of 16 in options?

How do you use gamma in options trading?

Which Greek is most important in options trading?

What Is A Currency Carry Trade in Forex Markets?

What Is a Currency Carry Trade?

How Do You Execute a Carry Trade?

Currency Carry Trade Basics

Carry Trade Example

Is a Carry Trade Risky?

The Takeaway

FAQ

How does a carry trade work?

What happens when a carry trade moves in the wrong direction?

What is the forex market?

7 Life Events You Should Financially Prepare For

1. Your First Job

2. Paying Off Student Loans

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3. Buying a Car

4. Buying a Home

5. Changing Jobs

6. Saving for Your Kids’ College

7. Retirement

The Takeaway

FAQ

How to financially prepare for life?

What are examples of life events?

What is the 1234 financial rule?

The Challenges of Modern Day Investing

What Is Modern Investing?

Key Characteristics of Modern Investing

Technology and Digital Platforms

Rise of Social Media and Influencers

Shifts in Young Adults’ Investing Strategies

What Are Challenges Facing Investors Today?

Strategies for Adapting to Today’s Changing Landscape

The Takeaway

FAQ

What are some investment strategies young adults may want to consider in today’s market?

Is modern investing really more complicated than it used to be?

What policies or changes might encourage more Americans to invest? Why?

What can be challenging in modern investing?

What does it mean to be diversified?

How Much to Invest in ETFs Per Month

Understanding ETF Investment Basics

Advantages of ETFs

Risks of Investing in ETFs

Determining Your Monthly ETF Investment Strategy

The Power of Dollar-Cost Averaging

Deciding on a Monthly Amount

Factors That Influence Your Monthly ETF Contribution

Financial Goals and Time Horizon

Current Financial Situation

Risk Tolerance and Market Conditions

Popular ETF Investment Strategies

Benefits of Consistent Monthly ETF Investing

The Takeaway

FAQ

What is the minimum amount I should invest in ETFs each month?

How do I choose which ETFs to invest in?

Should I invest a lump sum or spread my ETF investments monthly?

Can I automatically set up recurring monthly ETF investments?

Increase your savings
with a limited-time APY boost.*

Student Loan
Refinancing

Personal
Loans

Online
Investments