The major types of noise-trading activities include commodities and derivatives both of which trade in contracts. Commodities include physical and financial products. A derivative is a security whose value depends on the value of one or more separate underlying securities. Derivatives include future contracts as opposed to cash contracts on commodities as well as option contracts and indexes. Options include puts, calls, and combinations of these two forms.
Warrants are long-term options.
Rights offerings are in effect negative dividends or assessments that require the investor to contribute capital to the company issuing the rights. A mutual fund is merely a portfolio of cash and securities and its value is derived from the value of the portfolio holdings. Stock funds and bond funds might be useful for an investor with limited time, human capital, or financial capital. The largest such fund for any particular index can provide the lowest annual expense ratios for investing in that index. Another exception is writing covered call options.