Financial markets are places or systems where buyers and sellers can trade financial instruments such as stocks, bonds, currencies, and other financial assets. These markets are vital to the smooth operation of capitalist economies by allocating resources and creating liquidity for businesses and entrepreneurs. There are different kinds of financial markets, depending on what investors want to buy or sell, and all employ professionals and are regulated. Some examples of financial markets include:

• Stock markets: where people buy and sell shares in thousands of different companies.
• Bond markets: where businesses acquire investment capital, mutual funds, or bonds.
• Forex markets: where people trade currencies.
• Derivatives markets: where financial instruments are derived and traded based on an underlying asset such as commodities or stocks.
• Money markets: where short-term loans are traded, generally for a period of a year or less.

Financial markets allow for the determination of the price of traded financial assets through the interaction of buyers and sellers. They provide a sign for the allocation of funds in the economy based on the demand and supply through the mechanism called price discovery process. Financial markets also provide a mechanism for selling a financial asset by an investor so as to offer the benefit of marketability and liquidity of such assets.