Financial Markets Definition | CFI LB

financial markets

Financial markets, broadly speaking, are any place where governments and organizations can go to obtain financing, or traders can buy and sell [financial instruments]. The financial markets play a pivotal role in a country’s economic health, allowing governments and companies to access funding for growth and social policies for over 100 years.

 

Governments and companies tend to access finance via the bond markets and the stock markets, whereas traders operate within the foreign exchange, or forex, commodities, and derivatives markets.

 

Bond markets are where investors go to lend sums of money to governments and companies for a pre-determined length of time, at a pre-determined interest rate.

 

The stock market, probably the most famous of markets, is where companies will go to sell portions of the company’s ownership in order to generate income for the business.

 

Traders and investors traditionally bought and sold financial instruments via the telephone, initiated through a broker. However, since the advent of the internet, it has become increasingly common that traders can place orders into the market directly via an online digital platform.

 

The foreign exchange market is the largest of the financial markets with an average daily turnover of more than five trillion us dollars. This is where traders go to buy and sell currency, making their profits by capitalizing on fluctuations in the exchange rate.

 

Similarly, traders seek to generate profits from the buying and selling of commodities such as gold and oil, buying when prices fall, and selling as prices rise.

 

Another common activity for traders is speculating on the fluctuations of prices of assets like stocks, bonds, commodities, and market indices via the derivatives market.

 

Key takeaways:

 

  • Governments, companies, and traders go to the financial markets to generate funds
  • There are many types of markets, the most common being stocks, bonds, commodities, forex, and derivatives
  • Each market has its own pros and cons, influencing factors, and [strategies] for operating successfully
CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
CFI Financial Group has regulated subsidiaries in
London • Larnaca • Beirut • Amman • Dubai • Port Louis
Credit Financier Invest - CFI LEBANON
BDL no. 40
1019238,
Ellipse Center 3rd floor, Charles
Malek Avenue, Achrafieh

CFI provides execution-only services and does not provide any investment advice. To make an investment decision, you cannot rely on the content of this website, or on any information, opinion, report or other materials (“Information”) you receive from CFI, or its representatives. Such Information is general and does not consider your objectives and your financial situation, thus they shall not be considered in any way as an express or implied promise nor a guarantee of any profit or limit of loss. CFI shall not bear any liability in case you used or relied on such Information. Please ensure that you make your own research and seek independent advice if necessary.

Forex and CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose the entire invested capital. The majority of retail client accounts lose money when trading in CFDs. Please be aware of trading risks and that you could sustain a loss exceeding your deposited funds, even if a stop loss is used.

CFI Lebanon is regulated by the Banque du Liban and the Capital Markets Authority

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