Economy
What you Should Know About Different Types of Financial Markets
Financial experts from CMC Markets share their insights into the types of financial markets and offer guidance on choosing where to trade when using derivatives such as spread bets and CFDs.
With the shockwaves of war, the pandemic, and a shifting political landscape rippling across the world, there has never been a more important time for traders to choose their markets wisely. Here, we will take a look at some expert insights on what to consider before trading.
What are the different financial markets?
There are many different types of financial markets that range from currencies to commodities and bonds. Each market then has specific subsets. For example, the commodity market is broken into Energy, Precious Metals, and Agricultural commodities.
What is the foreign exchange market?
Also known as the “forex market”, the foreign exchange market is the world’s largest and most active trading market. It is also the most liquid, which means it is the easiest to convert trades into real cash. While foreign exchange trading has long been dominated by large global banks and institutions, in recent years, it has become increasingly popular and accessible to individual traders.
Trading currencies is slightly different from trading other assets. Trading other assets usually involves trading in one market with profit and loss based on absolute returns (unless you are spread betting). For example, if you buy and the market goes up, you could make money. If you buy and it goes down, you could lose money.
However, foreign exchange trading is done using currency pairs, with one currency being traded against another. Profits and losses are measured by how one currency performs relative to another. For example, on a given day, the US dollar (USD) could appreciate relative to the euro but also decline relative to the Japanese yen. In the foreign exchange market, there are no absolute returns as there may be in other markets.
What is the commodity market?
In the commodity market, there are two main types of traders: hedgers and speculators.
Hedging is a strategy that involves opening multiple buy or sell positions at once to reduce the risk of loss and protect your portfolio from factors that are beyond your control.
A typical example of a hedger is a trader who wants to lock in a price for a product that they will then use at a future date, using futures or forward contracts. For example, farmers and agricultural companies may want to lock in a price for wheat for when they deliver it in September. This means that if the price of wheat falls between when it is sowed and when it is harvested, the hedgers are protected against any significant losses.
Speculators, on the other hand, look to profit from changes in prices as supply and demand conditions change. They have no intention of delivering or taking physical goods and instead try to predict (or speculate) which direction a particular market is headed and then trade from there. Spread betters and CFD traders can be classed as speculative traders, as they bet on the price movements of financial instruments rather than making a direct investment.
Commodities tend to fall into the following groups:
- Precious metals and base metals
- Energy commodities
- Agricultural commodities
What is the treasuries and bond market?
The treasuries and bond market is another active trading market that gives you the opportunity to trade off wider economic trends across different countries.
Governments across the world issue bonds or gilts to individual investors, businesses, banks, and even other countries. A bond can be thought of as a share in the government – you lend them money for government spending and then they repay you with interest at a later date.
Governments sell bonds at different prices and with different rates of interest depending on the economic conditions at the time. Once a bond has been issued, it usually has a fixed rate of interest.
As well as interest payments, government bonds often also pay off with a lottery-style reward system that is drawn every month. Bond investors can receive tax-free cash prizes of up to £1,000,000 if their name is selected from the pool.
What is the stock market?
Stock market trading is what people usually think of when they think of financial markets and investments. The sale of shares from a company’s treasury to shareholders is known as the primary market.
With stock market trading, companies sell shares with the intention of raising further money and capital to expand their business. Traders may buy the shares with the expectation that the value of the company’s shares will rise; however, with derivative trading products such as spread bets and CFDs, you can also open short positions or sell the instrument if you expect the price of the stock to fall, which can lead to equal profits.
What are stock market indices?
Global market indices are the benchmark measure used to evaluate the strength or weakness of a particular region or country’s market performance.
A market index evaluates the performance of the top companies by market capitalisation or share price in a country. This is then used as a barometer for the market performance of a whole country and even to evaluate the impact of wider macroeconomic trends that can be seen in indices across the world.
Different indices are comprised of a different number of companies depending on the country. For example, the FTSE 100 evaluates the performance of the top 100 companies in the UK, whereas the Dow Jones 30 looks at the top 30 companies in the US.
Some of the best-known global market indices include:
- FTSE 100 (UK)
- Dow Jones 30 (US)
- Hang Seng (Hong Kong)
- DAX (Germany)
- CAC 40 (France)
- IBEX 35 (Spain)
- OMXS30 (Sweden)
- FTSE MIB (Italy)
How to choose which markets to trade
Understanding financial markets and deciding which ones to trade is, undeniably, complicated. However, there are a few different factors you should consider that can help to simplify the process, along with risk-management protocols.
For example, most traders begin their journey by trading in a market that they are familiar with before they look to branch out to international markets or assets that they are less familiar with.
Then, once you have started trading in a familiar market, you can try taking small steps into a similar area. For example, you might choose to expand trading from individual shares to stock indices or from resource shares to related commodities.
You should also keep your eye on both wider, macroeconomic trends (such as war or fuel supplies) and smaller shifts that are only taking place in a handful of niche markets. Balancing the small picture with the big picture is a key skill for any budding investor and spotting the relationship between small trends and big trends can lead to very smart trades.
Derivative trading comes with a number of risks, such as volatility within the financial markets and the potential of capital loss, so it is important you also consider how to combat these. For example, traders often place tools such as stop-loss and take-profit orders on positions after considering how much they are willing or able to lose. Even markets that some traders consider relatively safe, such as the bond market, can present opportunities for losses, so it’s important to always be prepared.
As MSMEs across the South-East seek opportunities for growth, market expansion and cross-border trade, Stanbic IBTC, in partnership with the Anambra State Government, convened the Nigeria Business Summit Regional Tour in Onitsha to equip businesses with practical solutions for sustainable growth.
The summit, organised in collaboration with the Anambra State Ministry of Commerce, Industry and Trade, brought together government officials, business leaders, trade associations, development partners and entrepreneurs to explore practical pathways for economic growth, business sustainability and increased participation in local and international trade.
Speaking at the event, which took place on Wednesday, 29 July 2026, Honourable Nonso Chukwuma Ebonwu, Commissioner for Commerce and Industry, Anambra State, highlighted the importance of stronger partnerships between government, financial institutions and the private sector in creating an environment where businesses can thrive and contribute meaningfully to economic growth.
“Sustainable economic development requires strong partnerships between the public and private sectors. Financial institutions such as Stanbic IBTC have an important role to play by providing not only access to finance but also business advisory services, capacity building and the knowledge that enables businesses to grow sustainably,” he said.
Given Onitsha’s strategic position as a commercial hub, discussions centred on access to finance, enterprise development, business sustainability and opportunities for expansion into new markets. Stanbic IBTC’s Trade Team also provided practical insights into trade and export opportunities available to businesses operating within the South-East’s manufacturing and distribution value chains, highlighting strategies that can help enterprises improve competitiveness and unlock new growth opportunities.
Commenting on Stanbic IBTC’s commitment to supporting Nigerian businesses, Chuma Nwokocha, Chief Executive, Stanbic IBTC Holdings, said:
“We recognise the critical role businesses play in driving economic growth, creating jobs and fostering innovation. Supporting their growth remains central to our purpose of driving Africa’s growth, and we will continue to provide the solutions, partnerships and platforms they need to thrive.”
Also commenting on Stanbic IBTC’s support for Nigerian businesses, Remy Osuagwu, Executive Director, Business and Commercial Banking, Stanbic IBTC Bank, said:
“Our commitment to supporting businesses is unrelenting. Through strategic partnerships and platforms such as the Nigeria Business Summit Regional Tour, we are connecting entrepreneurs to the knowledge, networks and financial solutions needed to scale their businesses and compete more effectively in today’s evolving marketplace.”
The summit also highlighted Stanbic IBTC’s focus on providing businesses with access to the capital, insights and connections needed to achieve sustainable growth. This commitment aligns with the strategic direction of the bank’s Enterprise Banking business, led by Olajumoke Bello, as Stanbic IBTC continues to deepen engagement with MSMEs and growth-focused businesses across Nigeria.
The Onitsha engagement builds on successful editions of the Nigeria Business Summit Regional Tour previously held in Katsina, Aba and Ibadan. Through the initiative, Stanbic IBTC continues to work with public and private sector stakeholders to equip entrepreneurs with practical insights, strategic partnerships and business solutions that support sustainable growth.
By Aduragbemi Omiyale
The board of Presco Plc has proposed the payment of an interim dividend of N10 per share to shareholders of the organisation for the first six months of this year.
This information was conveyed in the unaudited financial statements of the company released to the Nigerian Exchange (NGX) Limited.
In the results for the half-year ended June 30, 2026, the fully integrated agro-industrial firm said the cash reward reinforces its commitment to delivering consistent shareholder returns.
It further assured that looking ahead, it remains focused on disciplined capital allocation, operational efficiency and long-term value creation while navigating evolving market conditions.
A look at the key financial highlights of the results showed that revenue was relatively stable at about N199.0 billion in the first half of 2026 and the same period of 2025 amid a high-cost operating environment and softer crude palm oil prices.
However, the pre-tax profit rose by 9.3 per cent to N122.2 billion from N119.9 billion as result of a 31.9 per cent reduction in financing costs.
Further, the Edo State-based company posted an EBITDA of N123.1 billion, which yielded a margin of 61.9 per cent, as the organisation strengthened its balance sheet, reducing total liabilities by 42.5 per cent to N277.8 billion, while equity grew 13.8 per cent to N503.6 billion, with a current ratio of 345.6 per cent, which underscores robust liquidity.
“Our H1 2026 performance underscores the strength of our operational model in a challenging environment. The 9.3 per cent growth in profit before tax, driven largely by a 31.9 per cent reduction in financing costs, reflects our deliberate focus on cost optimisation and balance sheet discipline.
“With equity up 13.8 per cent and liabilities down by 42.5 per cent, we have further fortified our financial foundation.
“The proposed interim dividend of N10 per share signals our confidence in the business’s trajectory and our commitment to rewarding shareholders,” the chief executive of Presco, Mr Reji George, stated.
By Aduragbemi Omiyale
The ex-depot prices of the two major petroleum products in the country, Premium Motor Spirit (PMS), commonly known as petrol, and Automotive Gas Oil (Diesel), have been slashed by Dangote Petroleum Refinery.
The company, in a statement on Wednesday, disclosed that while petrol is now N1,165 per litre, diesel is now N1,570 per litre.
The energy firm said it slashed the prices to reaffirm its commitment to providing affordable, high-quality petroleum products to the Nigerian market.
The latest cut in the price of PMS represents N50, as it was previously sold to marketers at N1,215 per litre, while diesel witnessed an N80 reduction, as it was formerly being sold at N1,650 per litre.
Dangote Refinery stated that the downward price review reflects its ongoing efforts to enhance energy affordability, improve access to refined petroleum products, and support economic activities across Nigeria, saying it remains committed to ensuring stable supply while leveraging operational efficiencies to deliver value to consumers, businesses, and stakeholders.
As Africa’s largest refinery, Dangote Petroleum Refinery continues to play a pivotal role in strengthening Nigeria’s energy security, reducing reliance on imports, and supporting the nation’s economic development through the supply of world-class petroleum products.
The company reaffirmed its dedication to contributing to the growth of the Nigerian economy and passing on the benefits of improved operational efficiencies to consumers whenever market conditions permit.
