The most common financial markets that most investors will interact with are stock markets and bond markets, as these investments will usually form the basis for most portfolios. However, there are several other types of financial markets that deal in more complex financial products called derivatives such as commodities, foreign exchange (FOREX), and options markets.

The stock market specifically refers to markets where individuals and institutions trade partial ownership of a company called shares of stock in that company. Capital markets refer to a group of markets where companies can raise money including the stock market, but also the bond market, where investors can buy portions of a company’s debt called bonds, as well as other, more complex investments such as options and futures.

Primary markets are any market in which new stocks, bonds, or other types of investment are sold for the first time. A common example is an initial public offering (IPO), when a company first sells stock. Secondary markets are where existing investments are sold once someone had purchased them from the original seller. When people think of “the stock market,” or “the bond market” they usually are thinking of the secondary market for those investments.