At a glance
- Stocks trade on central exchanges during set sessions, forex trades between dealers 24 hours on weekdays, and crypto trades non-stop on many separate venues.
- Who holds your asset, and what happens if that firm fails, differs sharply between the three.
- Leverage turns the same 1% price move into very different results; retail caps exist for that reason.
This page has financial markets explained as a set of comparisons rather than definitions. Forex, stocks and crypto all match people who want to buy with people who want to sell, yet they are built differently: where the matching happens, when it happens, who keeps records of ownership and how much borrowing is allowed. Those design choices explain most of the practical differences you notice as a beginner.
Financial markets explained in one table
| Forex | Stocks | Crypto | |
|---|---|---|---|
| Where prices form | A network of banks and dealers, no single exchange | Regulated exchanges such as NYSE, Nasdaq or the LSE | Hundreds of independent venues plus on-chain pools |
| Trading hours | Sunday 17:00 to Friday 17:00 New York time | Fixed weekday sessions, closed on public holidays | 24 hours, 7 days |
| What you usually hold | A contract with your provider (often a CFD) | Shares held for you by a broker's nominee | A claim on an exchange, or coins in your own wallet |
| Settlement | Spot trades settle in two days between banks; retail positions roll over daily | US shares settle T+1 (one business day) | On-chain, usually minutes |
| Retail leverage (UK/EU CFDs) | Up to 30:1 on major pairs | Up to 5:1 on individual shares | Up to 2:1; crypto derivatives are banned for UK retail clients |
How a price is formed in each market
On a stock exchange every buy and sell order for a listed company goes into a central order book. The exchange matches the highest bid with the lowest offer, and the last matched trade becomes the price you see. Because there is one main book (plus some alternative venues linked by rules), a share has essentially one price at any moment.
Forex has no central book. Large banks quote prices to each other and to brokers, and retail providers build their own quotes from those feeds. That is why two forex platforms can show EUR/USD a fraction of a pip apart. Crypto sits at the other extreme: each exchange runs its own book, so the same coin can trade at noticeably different prices on different venues, especially when markets move fast.
- You place an orderBuy or sell, market or limit
- Provider routes itTo an exchange, a dealer or its own book
- MatchAgainst the best opposite price
- RecordBroker, exchange or blockchain updates ownership
When markets are open, and why gaps happen
Share prices only move while their exchange is open. If important news arrives overnight or at a weekend, the next session opens at a new level, leaving a "gap" on the chart. Forex runs through the week as trading passes from Sydney and Tokyo to London and New York, then pauses for the weekend, so gaps mostly appear on Sunday evening. Crypto never pauses, so there is no gap, but there is also no break in which to react calmly.
The market board on our homepage shows which sessions are open now in your time zone.
Leverage: the same move, very different outcomes
Leverage means controlling a position larger than the money you put down. The diagram shows what a 1% price move does to $1,000 of margin at three leverage levels.
At 30:1, a 1% move equals 30% of the money you committed. A move of a little over 3% against you would wipe that margin out, which is why regulators in the UK, EU and Australia cap retail leverage and force positions to close when margin falls to half the required level. Try your own numbers in the margin calculator.
Custody and protection if a firm fails
With a regulated stock broker, your shares are normally registered to a nominee company and kept apart from the broker's own assets. Forex and CFD providers in strict jurisdictions must segregate client money. Many countries add a compensation scheme up to a limit. Crypto is different: coins left on an exchange are often an unsecured claim if that exchange collapses, though new licensing regimes are starting to change this. Holding coins in a wallet you control removes that exposure but makes you responsible for your own keys.
Costs follow the structure
Each structure has its own way of charging you. On an exchange-traded share you typically pay a broker commission and cross the exchange spread. In retail forex the cost is mostly built into the spread your provider quotes, with overnight financing on leveraged positions. On a crypto exchange you usually pay a percentage trading fee plus network fees whenever coins move on-chain. Comparing markets on cost therefore means converting every charge into money for the same size of position, which our trading fees guide walks through.
Which market suits which purpose
- Long-term saving is usually discussed in terms of shares and diversified funds, because company profits can grow over time. See the stock market guide.
- Short-term speculation on economic news happens mostly in forex and index CFDs; the forex guide explains the mechanics.
- Crypto combines a new kind of technology with high volatility; start with how crypto works before buying anything.
Reader questions
Why does the same coin have different prices on different exchanges?
Each crypto exchange keeps its own order book with its own buyers and sellers. Traders who buy on the cheaper venue and sell on the dearer one narrow the gap, but transfer times and fees stop it closing completely.
Is the forex market regulated if it has no central exchange?
The market itself has no single regulator, but the firms that serve retail clients are licensed in most major countries. Your protection depends on the regulator supervising your provider.
Which market is open at weekends?
Crypto trades every day. The main forex market and stock exchanges close at weekends; a price you see on a Saturday for a currency or share is not a live market price.
Sources
- UK Financial Conduct Authority, CFD and crypto-derivative rules
- European Securities and Markets Authority, CFD product intervention measures
- US Securities and Exchange Commission, T+1 settlement rule