Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 1 - Trading Introduction
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 2 - Financial Products
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 3 - Economic Principles
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UNIT 1 – FINANCIAL MARKETS

In this first lesson, you will be introduced to the markets and their attributes. By the end of this lesson you will be able to:

  • Identify each market by its attributes
  • Describe the difference between Hedgers and Speculators
  • Identify the diverse types of trading used
  • Explain spreads and their uses

THE FINANCIAL MARKETS – THE OPPORTUNITY FOR OPPORTUNITY

“I used to think that if there was reincarnation, I wanted to come back as the President or the Pope. But now I want to be the bond market: you can intimidate everybody”

– Aide to President Clinton

It is a given that in business, people strive to manage their assets and liabilities to seek maximum advantage, which in turn believe will bring them life fulfilment, happiness, and success.

Financial markets therefore provide opportunity to almost anyone.

It is in the arena of financial markets where business is conducted, fortunes are made and lost. Here only the fittest survive!

So, what are financial markets?

WHAT ARE FINANCIAL MARKETS?

A financial market is a mechanism that allows people to buy and sell (trade) financial securities (such as stocks and bonds), commodities (such as precious metals, energy, or agricultural goods), and other fungible items of value at low transaction costs and at price.

Markets work by placing many interested buyers and sellers in one “place”, thus making it easier for them to find each other to trade.

The word finance originally came from the French word ‘finer’ meaning to settle a debt, and market derives from the Latin word ‘mercari’ which means to buy.

The term ‘Financial Market’ can often seem overwhelming. It is impossible nowadays to avoid the subject because it features when you read, watch or listen to the news. However, more often than not when you read or watch media coverage the whole thing can leave you feeling rather confused, often being above the experience of most people. Yet whatever your level of experience it goes without saying that in business people strive every day to manage their assets and liabilities to seek maximum advantage.

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