Three things to keep
- Shares trade mainly on regulated exchanges during set hours; forex and gold trade over the counter through banks and dealers almost 24 hours on weekdays; crypto trades non-stop on hundreds of separate platforms.
- Every price you see is a bid and an ask; the gap between them is a cost you pay each time you trade.
- Protections such as compensation schemes and leverage caps depend on the product and the firm's regulator, not on the asset itself.
Financial markets explained simply are places, physical or electronic, where people who want to buy something meet people who want to sell it. The "something" may be a currency, a share in a company, a bar of gold or a crypto token, and each market has grown up with its own habits: different trading hours, different middlemen and very different levels of protection for ordinary investors. Knowing those differences is the first defence against expensive surprises.
Financial markets explained: what they are for
Markets do three jobs. They let companies and governments raise money, as when a firm sells new shares or a government issues bonds. They let people move risk to someone willing to carry it, as when an exporter locks in a future exchange rate. And they produce prices, a constant public estimate of what something is worth given everything buyers and sellers know. For a long-term investor the third job matters most: prices tell you what others are paying, not what an asset will be worth later.
The four markets on this site
| Market | Where it trades | Usual hours | Typical retail access |
|---|---|---|---|
| Forex | Over the counter, between banks, dealers and brokers | Sunday 17:00 to Friday 17:00, New York time | Spot forex or CFDs through a broker, usually leveraged |
| Gold | Over the counter spot market, plus futures exchanges | Nearly 24 hours on weekdays, with a short daily break | CFDs, exchange-traded funds or physical metal |
| Shares | Regulated stock exchanges such as the NYSE, Nasdaq or the London Stock Exchange | Set sessions on weekdays, e.g. 09:30 to 16:00 in New York | A share-dealing or investment account |
| Crypto | Hundreds of independent crypto platforms and on-chain venues | 24 hours a day, every day | An account with a crypto platform, or a self-custody wallet |
Our live board on the home page shows which of these is open where you are right now.
Exchanges versus over-the-counter markets
An exchange is a single venue with public rules, a central order book and a clearing house that stands between buyer and seller so that one side's failure does not ruin the other. Most shares and futures trade this way. An over-the-counter (OTC) market has no single venue: dealers quote prices to their clients, and each trade is a private agreement between two parties. Spot forex and spot gold work like this, and so does the contract you hold when you trade a CFD with a broker.
The practical difference is who stands on the other side of your trade. On an exchange it is effectively the market as a whole. In an OTC product it is usually your broker, which is why checking that broker matters so much; our guide on how to choose a broker walks through the checks.
How a price forms
Every tradeable price has two sides. The bid is the best price someone will pay; the ask (or offer) is the best price someone will sell at. If EUR/USD shows 1.0848 / 1.0850, you sell at the first number and buy at the second, and the 2-pip gap is the spread. A share quoted at 99.95 / 100.05 has a spread of 0.10, which is 0.1% of the midpoint. When buyers outnumber sellers, both numbers move up; when sellers dominate, they fall.
Who trades, and why it matters to you
The largest participants are banks, asset managers, pension funds, insurers, companies hedging their foreign income, and, in currencies, central banks. Retail traders are a small share of volume in every market except parts of crypto. That has two consequences. Prices are driven mostly by large flows and economic news rather than by individual views, and the professionals on the other side have better data, lower costs and faster systems than any private investor.
For most people the realistic edge is not speed but patience: keeping costs low, diversifying, and avoiding leverage they do not understand.
Regulation and protection
Protection follows the product and the firm, not the asset. A share held in a regulated investment account is usually registered to you, kept separate from the firm's own money, and may be covered by a compensation scheme if the firm fails. A leveraged CFD on the same share is a contract with the broker, subject to retail leverage caps (5:1 on individual shares in the UK and EU) and to negative balance protection for retail clients there. A crypto token held on an unregulated platform may have none of these safeguards at all, and in the UK the sale of crypto derivatives to retail consumers has been banned since 2021.
Information, noise and forums
Every market now has a constant stream of commentary. Discussion boards, reddit investing threads, video channels and group chats can be useful for learning vocabulary and hearing different views, but they are not research. Posts are unverified, survivorship is severe (people share wins far more than losses), and coordinated promotion of small coins and shares is common. Treat any claim as a lead to check against primary sources, such as a company's own filings, an exchange's rule book or a regulator's register, rather than as a conclusion.
Short-term trading and long-term investing
The same markets serve two very different activities. Trading tries to profit from price moves over minutes to weeks, often with leverage, and depends on timing. Investing buys assets to hold for years, relying on company earnings, interest or diversification rather than timing. Costs weigh far more heavily on the first, because they are paid on every round trip. Our guide to trading fees shows how quickly they compound.
Next, see how each market works in detail: forex, stocks and crypto.
Reader questions
What is the difference between an exchange and a broker?
An exchange is the venue where trades are matched under public rules. A broker is the firm that gives you access, holds your account and either sends your order to an exchange or, for OTC products such as CFDs, takes the other side itself.
Which financial market is the largest?
By daily turnover, the foreign exchange market. The Bank for International Settlements measured average trading of $9.6 trillion a day in April 2025.
Are forums a good place to learn about investing?
They can help with vocabulary and different viewpoints, but posts are unverified and often promotional. Check every claim against primary sources before acting on it.
Sources
- Bank for International Settlements, Triennial Central Bank Survey 2025 (OTC foreign exchange turnover, April 2025)
- UK Financial Conduct Authority, retail CFD rules and crypto-derivatives ban
- European Securities and Markets Authority, product intervention measures on CFDs