There are financial markets, which can be found all around the world, where individuals and institutions trade financial securities. Each country has capital markets, money markets, spot markets, derivative markets, and more, but every single one is different from the other.
In either case, the interbank Forex market is the largest financial market among them in terms of daily traded volume. The Interbank market can be described as a part of the financial system and currency trading between banks and institutions, that rarely does or does not include retail investors or small trading parties.
Bonds and Forex explained
The Forex market is where participants can buy, sell, exchange or even speculate on currencies. The Forex market is made of banks, investment management firms, retail Forex investors, and brokers as well as hedge funds. Forex is a market of $6.6 trillion in daily transactions, as reported by the Bank for International Settlements (BIS) in April 2019.
The bond market, also known as the debt market or credit market, is where investors can trade and exchange bonds. This is where its participants can issue new debt, better known as the primary or principal market, or buy and sell debt securities, known as the secondary market. The goal behind it is to provide long-term funding for public or private expenditures.
Top difference between the two
Now that we have defined both Forex and bond markets, we can take a step to discuss some of the differences between the two investment options so you can pick the one that fits your ones and desires the most.
Which one's better for you?
When you look at these two markets, it becomes evident that they are wildly different investment options. The bond market represents a slower and steady way of investing with a time and place. Forex is completely different, it is quick, and it enables real-time trades and great liquidity.
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