section_path: Types of financial markets/Stock market and foreign exchange market
section_name: Stock market and foreign exchange market
paragraph_text: Stock market and foreign exchange market
  
  While the stock market is the marketplace for buying and selling company stocks, the foreign exchange market, also known as forex or FX, is the global marketplace for the purchase and sale of national currencies. It serves several functions, including facilitating currency conversions, managing foreign exchange risk through futures and forwards, and providing a platform for speculative investors to earn a profit on FX trading. The market includes various types of products, such as the spot market, futures market, forward market, swap market, and options market. For example, the spot market involves the immediate buying and selling of currencies, while the forward market allows for the buying and selling of currencies at an agreed exchange rate, with the actual exchange taking place at a future delivery date. The foreign exchange market is needed for facilitating global trade, including investments, the exchange of goods and services, and financial transactions, and it is considered one of the largest markets in the global economy.