As all processes in the world economy are closely interlinked, it is not a good idea to consider Forex market separately from other ones. Any changes on the currency market can have great influence on currency quotes. That is why it is important to know peculiarities of their interaction, common and distinctive features.
Today we are going to compare both currency and stock markets. Recall that the trading instruments of the stock market are securities – shares, bonds, derivatives (warrants, futures, and options), savings accounts and certificates of deposit (CDs), and promissory notes.

Two markets are compared by the following parameters:

1. Participants

The main difference of stock market is that the buyer and seller must find each other. This is complicated by the fact that the liquidity on the stock market is much lower than on Forex, so the probability of losses increases markedly. After all, if a trader would not find a buyer for shares in time, they will drop significantly in price.

2. Locations of Trade

Unlike Forex, which has no spatial restriction, trading on stock market takes place only on stock exchanges. Due to their locations in various spots around the world, share price on different stock exchanges can differ. So there is arbitrage with securities bought on one exchange and sold on another one. Forex market does not have such option. In fact, there is no need as Forex does not provide central location where trading takes place.

3. Features of Deals

Stock market operates on the principle: buy cheaper – sell more expensive. On the contrary, Forex trading focuses either on currency rise or fall.

4. Leverage

Margin Trading is available only on Forex. Whereas you can buy or sell on stock market using only the amount of money you have.

5. Working Time Limits

You can trade on Forex 24/7, while stock market has its opening and closing time.

Stock market surely has a number of its advantages. They are, for example, dividends and the right to manage companies, coupon payments on bonds, and redemption of government securities. Therefore, it is you to choose your market according to your own interests, goals and objectives.