Financial market is a structure where financial assets, such as securities or currency units circulate.

Foreign Exchange Market or FOREX is a decentralized structure where currency units circulate. It is by far the biggest financial market in terms of trading volumes.

The value of a certain currency in each period of time depends on supply and demand given the floating nature of currency’s exchange rate (except a number of currencies whose rate can be “pegged” to another one or can be regulated by other means). Exchange operations between participants of financial markets can influence the economic relations between both relatively small economic actors as well as whole countries. For example, they can influence the volumes and timeliness of settling of trade operations in goods and services.

The main feature of FOREX market is the fact that in this market money is not only a medium of exchange but is a good in itself, a mean of interactions between the participants. Balance level between the supply and demand for a certain currency fluctuates constantly, thus the “price” of a currency fluctuates as well in real time.

Major players in FOREX market are central banks and currency exchanges. Those who can also significantly influence this market are commercial banks, brokerage companies and other private and legal persons conducting activities involving international payments.

Commodities Market is a market where so called “traded commodities” circulate. Commodities are traded in commodity exchanges, where certain standards are set for traded goods, such as standard contracts between the participants, price quotes etc.

Commodities traded in such markets can be:

  • Precious and industrial metals, such as gold, silver, platinum, copper or alumunium;
  • “Soft commodities”, such as sugar, coffee, soybeans, wheat;
  • Energy commodities, such as oil, natural gas, heating oil.

Capital Market is a market mainly in securities (stocks, bonds, indices). Earlier, capital markets required the existence of physical exchange, where brokers were located to conduct buying and selling securities. Nowadays electronic trade replaces trading at particular locations and all major exchanges provide trading facilities via electronic channels, accessible from any location in the world.


 

The material presented and the information contained herein is intended for NTFX Capital Ltd customers, and is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2018 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.