The foreign exchange market, also refereed as Forex, FX, or currency market is a global decentralized or over-the-counter (OTC) market for the trading of currencies.
This market determines foreign exchange rates for every currency.
It includes all aspects of buying, selling and exchanging currencies at current or determined prices.
In terms of trading volume, it is by far the largest market in the world, followed by the credit market.
The main participants in this market are the larger international banks. Financial centers around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock,
with the exception of weekends. Since currencies are always traded in pairs, the foreign exchange market does not set a currency's absolute value but rather determines its relative value by setting the market price of one currency if paid for with another. Ex: US$1 is worth X CAD, or CHF, or JPY, etc.
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil.
Investors access about 50 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets.
Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.
A financial derivative is a financial instrument whose value is derived from a commodity termed an underlier.
Derivatives are either exchange-traded or over-the-counter (OTC). An increasing number of derivatives are traded via clearing houses some with central counterparty clearing, which provide clearing and settlement services on a futures exchange, as well as off-exchange in the OTC market
A stock market, equity market or share market is the aggregation of buyers and sellers of stocks (also called shares),
which represent ownership claims on businesses; these may include securities listed on a public stock exchange,
as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms.
Investment in the stock market is most often done via stockbrokerages and electronic trading platforms.
Investment is usually made with an investment strategy in mind.
A stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current price levels with past prices to calculate market performance.
It is computed from the prices of selected stocks (typically a weighted arithmetic mean).
Two of the primary criteria of an index are that it is investable and transparent:
The method of its construction are specified. Investors can invest in a stock market index by buying an index fund, which are structured as either a mutual fund or an exchange-traded fund, and "track" an index. The difference between an index fund's performance and the index, if any, is called tracking error. For a list of major stock market indices, see List of stock market indices.