The place where investments are bought and sold is called a financial market. Financial markets are marketplaces where securities such as stocks, bonds, derivatives, and other financial instruments are traded between buyers and sellers
. More specifically, when it comes to stocks and shares, these transactions often occur on a stock exchange. A stock exchange is a type of financial market that provides a centralized platform-either physical or electronic- where traders buy and sell stocks and other securities. Examples include the New York Stock Exchange (NYSE) and Nasdaq
. Financial markets include various types such as:
- Stock markets (for shares of companies)
- Bond markets (for debt securities)
- Forex markets (for currencies)
- Derivatives markets
Financial markets can be organized as exchanges or operate over-the-counter (OTC), where trading happens directly between parties without a centralized exchange
. In summary:
- The broad term is financial market -any marketplace for trading investments.
- For stocks and similar securities, the specific venue is often a stock exchange
