Lesson 3: Market Participants & Institutions

Lesson Overview

Financial markets operate through the interaction of various participants and institutions, each playing a specific role.

Retail Participants

• Individual investors and traders

• Trade through brokers and online platforms

• Typically smaller trade sizes

Institutional Participants

• Banks and financial institutions

• Hedge funds and asset managers

• Pension funds and insurance companies

They influence markets significantly due to large capital flows.

Market Infrastructure

• Exchanges: Provide trading platforms

• Brokers: Execute trades on behalf of clients

• Market makers: Ensure liquidity

Regulatory Bodies

Regulators protect investors and maintain market integrity:

• SEC (USA)

• FCA (UK)

• ESMA (EU)

Key Takeaway

Markets remain efficient and transparent due to the coordinated roles of participants and regulators.