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What Are Financial Markets?

Financial markets refer broadly to any marketplace where securities trading occurs, including the stock market, bond market, forex market, and derivatives market. Financial markets are vital to the smooth operation of capitalist economies.

KEY TAKEAWAYS

  • Financial markets refer broadly to any marketplace where the trading of securities occurs.
  • There are many kinds of financial markets, including (but not limited to) forex, money, stock, and bond markets.
  • These markets may include assets or securities that are either listed on regulated exchanges or trade over-the-counter (OTC).
  • Financial markets trade in all types of securities and are critical to the smooth operation of a capitalist society.
  • When financial markets fail, economic disruption, including recession and rising unemployment, can result.