The answer in three lines
- Stocks trade on a few regulated exchanges in set sessions; forex is a weekday dealer network with no single venue; crypto trades around the clock on many separate platforms.
- Settlement ranges from one business day for US shares to minutes on a blockchain, and custody ranges from ring-fenced nominee accounts to a platform's own wallets.
- Leverage and investor protection are tightly defined in regulated forex and stock markets and far less uniform in crypto.
Financial markets explained from the ground up start with one idea: a market is a set of rules for bringing buyers and sellers together. Forex, stocks and crypto all let you buy something and sell it later, but they differ on who quotes the price, when you can trade, how the deal is completed and what happens to your money if an intermediary fails. Those differences explain most of the surprises readers run into when they move from one market to another.
Where does the price come from?
From an exchange's order book for shares and most crypto, and from a network of dealers for currencies.
A listed share trades on regulated venues. Buyers post bids, sellers post offers, and a matching engine pairs them. In the United States, trading is spread across several linked exchanges and other venues, but rules require brokers to seek the best available price for their clients, so the quoted price stays consistent across them.
Currencies have no central exchange. Large banks and dealers quote prices to each other and to their clients, and retail brokers take prices from those liquidity providers, adding a spread or commission. Two brokers can show slightly different EUR/USD quotes at the same instant, because each has its own sources and pricing.
Crypto borrowed the order-book model but not the linkage. Each exchange runs its own book, and nothing forces prices to match across them except traders who buy on one and sell on another. That is why Bitcoin shows slightly different prices on different platforms, and why the gap can widen sharply in a fast market.
When can each market be traded?
Shares in fixed sessions on weekdays, currencies around the clock from Sunday evening to Friday evening New York time, and crypto continuously.
| Market | Regular hours | What that means in practice |
|---|---|---|
| US shares (NYSE, Nasdaq) | 09:30 to 16:00 New York, Monday to Friday | News outside the session appears as a gap at the next open. |
| UK shares (LSE) | 08:00 to 16:30 London | Overlaps the US session for a few hours each afternoon. |
| Tokyo and Hong Kong shares | Morning and afternoon sessions with a lunch break | Asian news can move prices before Europe opens. |
| Forex | Sunday 17:00 to Friday 17:00 New York | A daily rollover at 17:00 New York, when overnight financing is applied. |
| Crypto | 24 hours, 7 days | Weekend news is priced in immediately, often in thinner liquidity. |
The live board on our home page shows which of these are open at this moment, in your time zone.
What happens after you press buy?
The trade is matched instantly, but ownership changes hands at settlement, and settlement timing differs by market.
US share trades settle one business day after the trade date, a cycle known as T+1 that took effect in May 2024. Until then, the clearing system stands between buyer and seller so that neither is exposed if the other defaults. Most retail forex is not settled at all in the physical sense: a leveraged position is a contract with the broker, rolled forward each night until you close it.
On a crypto exchange, a trade between two customers usually just updates the exchange's internal ledger; no blockchain transaction happens until you withdraw. When coins do move on-chain, settlement comes from the network's confirmations rather than from a clearing house, and a confirmed transfer cannot be reversed by anyone.
Who holds your assets while you own them?
A nominee structure for shares, a contract for most retail forex, and often the platform's own wallets for crypto.
| Shares via a broker | Forex or CFDs | Crypto on an exchange | |
|---|---|---|---|
| What you hold | Legal or beneficial ownership of shares, held in a nominee account | A contract whose value tracks a price | A claim on the exchange, unless you withdraw to your own wallet |
| If the firm fails | Client assets are ring-fenced; some countries add a compensation scheme | Client money rules and, in some countries, limited compensation | Depends on the jurisdiction; often no compensation scheme |
| Can you take delivery? | You can usually transfer shares to another broker | No, it is a cash-settled contract | Yes, by withdrawing to a wallet you control |
How much leverage is allowed?
In the UK and EU, retail limits run from 30:1 on major currency pairs down to 2:1 on crypto CFDs; many offshore crypto venues offer far more.
Regulators cap leverage for retail clients because a small adverse move on a highly leveraged position can wipe out the whole deposit. Under UK and EU rules, retail CFD limits are 30:1 on major currency pairs, 20:1 on non-major pairs, gold and major indices, 10:1 on other commodities, 5:1 on individual shares and 2:1 on crypto-assets. The UK goes further and bans the sale of crypto derivatives to retail consumers altogether. US retail forex is capped at 50:1 on majors. Our margin calculator shows what a given leverage level means in collateral.
What does this mean for a learner?
Learn the rules of each market before transferring habits from another.
- A crypto trader moving to forex meets smaller price moves, weekend closures and overnight financing. Start with how forex trading works.
- A forex trader moving to crypto loses the safety net of leverage caps and, often, of compensation schemes. Read how crypto works and what to check before using a platform.
- Anyone moving into shares gains ownership rights, dividends and the idea of valuing a business. See the stock market for beginners.
Financial markets explained: the short version
If you keep only one idea from this page, keep this one: the asset is not the only thing you are exposed to. You are also exposed to the venue, the intermediary, the settlement process and the rules of the country where the intermediary sits. A share of a large company bought through a regulated broker, a currency position held with an offshore provider and a coin held on an exchange can all move by the same percentage in a day, yet their risks if something goes wrong are completely different. Checking structure first, and price second, is a habit that pays off in every market.
Follow-up questions
Why is there no single price for a currency pair?
Forex is a dealer network, not a single exchange. Each broker takes quotes from its own liquidity providers and adds its own spread, so small differences between brokers at the same moment are normal.
Is crypto settlement faster than stock settlement?
An on-chain transfer can be final within minutes, while US shares settle one business day after the trade. But most trades on a crypto exchange never touch the blockchain until you withdraw, so the exchange's own records are what count in the meantime.
Does a regulated broker guarantee I cannot lose money?
No. Regulation protects how your money is held and how products are sold. It does not protect you from market losses on the positions you choose to take.
Sources
- UK Financial Conduct Authority, restrictions on CFDs and crypto-derivatives for retail consumers
- European Securities and Markets Authority, product intervention measures on CFDs
- US Securities and Exchange Commission, T+1 settlement cycle