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The Concept of Financial Markets
The definition of financial markets is not much different from the general concept of a market. Financial markets refer to the place or entity where a seller and a buyer meet to execute a transaction or trade. The seller is willing to sell a commodity and offers it for a certain price, while the buyer has both the desire and the money to purchase the commodity and makes a purchase request. In this case, the commodity is a financial instrument, and the role of the financial market is to facilitate the buying or selling of this instrument, which could be in the form of stocks, bonds, commercial papers, etc.

Therefore, we can define financial markets as a place or entity where offers and demands for trading financial instruments are available. This happens either in a regulated and centralized market through a specific platform like the stock exchange or in an unregulated market known as over-the-counter (OTC) trading. The financial market is an asset market of various types and forms, where these assets are tradable. Ownership of the asset is not always required to trade it; rather, it is a financial instrument prepared for trading according to specific rules and regulations.

Function and Importance of Financial Markets
The importance of financial markets lies in providing cash and liquidity for various commercial and economic activities. They transfer saved money (after basic living expenses) into investment channels by directing them to sectors that need funding. The market fulfills this role through various financial operations, starting with the issuance of financial instruments, offering them to the public for subscription, and then trading them via sell offers and buy orders.

Types of Financial Markets
Financial markets differ based on the types of financial instruments traded or the methods of trading. The most important and well-known types include:

Capital Markets:
These are the most common and are divided into the stock market and bond market.

The difference between a stock and a bond is that both are financial instruments, but a stock represents part of a company’s capital, while a bond represents debt owed by the company. A stock is a share in the capital of a joint-stock company, with equal value, indivisible by its owner, and tradable commercially. A bond is a tradable financial certificate confirming that its holder has lent a specific amount to a company, granting them the right to claim the loan amount plus interest at maturity—a written commitment to repay the loan at a specified date for a defined interest.

Foreign Exchange Market (Forex):
This is the market for trading foreign currencies and is the largest financial market in terms of trading volume and liquidity. It is referred to as Forex. Investors in the Forex market benefit from changes in foreign exchange rates, treating world currencies as tradable financial instruments by exchanging one currency for another, buying at low prices, and selling at higher ones.

As explained in the following video:

Commodity Market:
One of the oldest financial markets, originally based on trading agricultural products. In this market, main commodities such as wheat, sugar, cocoa, gold, and oil are traded via spot, forward, or future contracts, or through options contracts. Speculative trading on commodity prices using Contracts for Difference (CFDs) has also emerged.

Cryptocurrency Market:
A relatively new market that emerged with the appearance of cryptocurrencies. It enables traders to trade new digital currencies just like traditional ones. It is also called the crypto asset market, where all transactions are recorded in a ledger that works through the blockchain system.

Financial Derivatives
Financial derivatives or the derivatives market consist of contracts whose value is derived from the value of underlying assets. These contracts allow for trading assets in various ways to achieve gains based on price fluctuations. Derivatives exist across all financial markets, whether for stocks, bonds, currencies, or commodities, and are primarily used to reduce price fluctuation risks.

Types of financial derivatives include:

• Spot Market:
  Where the asset is traded instantly at the current price, even if the actual execution takes a few minutes—it is still considered "spot" because the deal is executed at the current rate.

• Forward Contracts:
  Agreements between two parties to buy or sell a specific financial asset at a future date for today’s price. These contracts aim either to generate more profit by predicting price increases or to reduce the risk of future price volatility.

• Futures Contracts:
  Legally binding contracts between two parties to trade a financial instrument at a future date. Similar to forward contracts, but standardized and regulated by official bodies.

• Options Contracts:
  A contract that gives the holder the right but not the obligation to buy or sell a financial asset during a specific period. The buyer pays a premium (deposit) to gain this right. Thus, the buyer can choose to execute or withdraw (losing only the premium), while the seller must execute if the buyer exercises the option.

Investing in Financial Instruments
Many people invest in financial instruments to increase income and wealth or protect their money from inflation and other risks. The goal is to generate profits through trading or investing, whether short-term, mid-term, or long-term, depending on their outlook for the asset.

Investors can earn returns through two main ways:

1. Returns from the asset itself
   For example, in the stock market, profits may come from dividend distributions received by shareholders.

2. Price movement of the asset
   In the Forex market, investors can profit by buying currencies at low prices and selling them later at higher prices, or by speculating using leverage and margin trading to gain more from a smaller capital in a shorter time.

Anyone, regardless of capital size, can invest in any financial market through brokerage firms, after learning how to analyze financial markets.

Financial Market Analysis
Before trading, you must be able to predict price directions. The success of your trades depends heavily on how accurately you can forecast price movements. This is where analysis plays a crucial role.

Generally, analysis involves studying current and historical data to try to predict future trends. When applied to financial markets, the data could be either price data or financial/economic data depending on the asset being analyzed.

The two main types of analysis are:

• Technical Analysis:
  Studying price movements (historical and current) using charts to predict future price directions without considering the causes of those movements. If a price rise is expected, the analyst considers entering a buy trade; if a decline is expected, they consider a sell trade.

• Fundamental (Economic/Financial) Analysis:
  Involves studying economic, political, or financial factors related to the country or company of the asset, identifying the impact on supply and demand forces that influence asset prices. This helps determine whether the impact is positive or negative, which in turn helps predict the asset’s future price direction.