Five markets, not one tape
Traders talk about "the market" as if it were a single room. It is several markets, with different instruments, different hours, and different ways a trade is born. This chapter names the five you will keep meeting: equities, foreign exchange, cryptocurrency, bonds and commodities, and credit default swaps.
Equity markets
An equity is a share in a company. Market capitalization is the share price multiplied by the number of shares outstanding. A listing is the venue where that share is admitted to trade. The cash session is the official day on that venue. Quotes can exist before the open and after the close, but the regular session is the one most index calculations and most volume still refer to.
- Price tells you the last auction, not the size of the company. Market cap does that.
- A ticker can be listed on more than one venue. The listing you watch is the one whose session clock you are using.
- An index is not a share. It is a calculated basket. You trade it through futures, options, or a fund that tracks it.
Foreign exchange
FX is quoted in pairs: the price of one currency in another. The spot market is the price for near-immediate exchange. A forward is an agreement to exchange later at a price set now. The market runs through the week across Sydney, Tokyo, London, and New York, so it does not have one opening bell. Liquidity still bunches when London and New York overlap.
Cryptocurrency markets
A crypto spot market trades the coin or token itself. Liquidity may sit on a central order book or in a pool that quotes a price from its inventory. Weekend trading is normal. That does not make the market deeper. It often means the same news hits a thinner book.
Bonds and commodities
A bond is a loan. Sovereign debt is a loan to a government. The yield curve is the set of those yields across maturities, and it moves when growth and inflation expectations move. Commodities are physical goods, or the contracts written on them: metals, grain, and energy. Energy markets include the fuels and the paths that move them, so a headline about a pipeline is a supply story, not a chart pattern.
Credit default swaps
A credit default swap is a contract that transfers the credit risk of a borrower. The buyer of protection pays a premium. The seller of protection pays if a defined credit event hits. It is an institutional hedge and a way to express a view on default risk. It is not a beginner substitute for owning a bond, and this course does not treat it as one.
