Financial Market

The financial market is a space in which the buying and selling of financial assets is authorised. When speaking of financial assets, you can refer generally to financial instruments (such as shares, bonds, derivatives or ETFs) as well as other investment categories such as commodities or precious metals.

The trading venue of financial markets was once represented exclusively by physical entities such as a bank counter or a financial advisor. Thanks to the increasing adoption of the Internet, it has also taken hold online through brokers or exchanges.

The performance of financial markets is governed by the law of supply and demand, as for any market.
In this case, the demand is made up of investors who wish to enter a market by buying financial instruments and securities, while the supply is made up of all entities that issue financial instruments to obtain capital and liquidity or investors who wish to exit the financial market by selling their securities. 

Of course, the financial market is not unique and universal. There are different types of financial markets.
In general, a first distinction is made between primary and secondary markets:

  • In primary markets, instruments and assets are placed on the market directly by companies or institutions on an ‘exclusive’ basis. Generally, public sales campaigns such as IPOs (Initial Public Offerings) are used to launch new financial instruments on the market.
  • Secondary markets regulate the buying and selling of financial instruments between investors without directly involving the issuing company. OpenSea, for instance, gives the possibility to buy and sell NFTs already placed on the market (Non-Fungible Token) and thus already owned by its first buyer.

Some forms of markets are also unregulated and take place mainly online. This is the case with over-the-counter markets, represented for instance by the Forex market, the Nasdaq and in some cases cryptocurrencies. This form of buying and selling is often more direct and personalised, as it is carried out through price negotiations between a client and a broker and because it allows buying or selling outside standard limits, e.g. in terms of amounts or time limitations.

Correlated words

URL

Stringa di caratteri associata in String of characters uniquely associated with a resource on the World Wide Web. univoca ad una risorsa sul World Wide Web.

IP address

Numeric strings that uniquely identify every resource to the network

Web 3.0

A term often associated with the idea of the 'Semantic Web' and data interoperability, it represents the next phase of the Internet.

ICANN

Organisation that manages domain names on the Internet and assigns IP addresses.

Registrar

Organisation that deals with the sale and registration of domain names.

DNS

Hierarchical server system that, on the Internet, associates each domain name with an IP address.

TLD

The domain extension placed at the end of a URL address,located at the highest point in the DNS hierarchy.

Cashback

Cashback involves a partial reimbursement of funds spent in a transaction.

Web3

Third historical phase of the web, during which the economic and technological system of the internet changes thanks to the tools offered by blockchain.

Bitcoin

The longest-lived cryptocurrency on the market and the first application of blockchain.

Wallet address

The string of characters that identifies a cryptocurrency wallet.

Stablecoin

Cryptocurrencies pegged to the price of a stable asset such as a fiat currency or precious metal.

Custody

Managing one's wallet by knowing its private key

White Paper

Technical and informative document used by cryptocurrency projects to present their technological proposal.

Wallet

Software that allows you to send, receive and store your cryptocurrencies.

Virtual Currency

Term used in legislation to define cryptocurrencies.

Fiat Currency

Legal tender, i.e. the official currency adopted by a government.

Token

Digital unit of value based on a third-party protocol.

Satoshi Nakamoto

The pseudonym used by the creator or group of developers of Bitcoin.

Open-source

Open-source software is public and available for anyone to reuse.

KYC

Identity verification procedure required by European regulations for exchanges.

Hard Fork

A division of the blockchain due to the incompatibility of the new version of the protocol with the previous one.

Hot Wallet

A cryptocurrency wallet connected to the internet.

Halving

The halving of the reward given to miners for each validation, every 4 years.

FinTech

A sector that combines finance and technology, where companies develop technologically innovative financial services.

Cryptography

The branch of computer science that studies secure communication methods.

Cryptocurrency

Virtual currency based on cryptography and blockchain.

Coin

A cryptocurrency that is natively based on its blockchain

Public Key

Cryptographic code that identifies a wallet on the blockchain.

Private Key

Cryptographic code that gives access to a wallet.

API

Tools that simplify the development of apps and web services.

Altcoin

Cryptocurrencies that followed Bitcoin as alternative solutions.

AML

Anti-money laundering regulations prevent illegal activities on centralised exchanges.

Algorithm

The procedure applied to solve a problem.

Exchange

Services facilitating the purchase and sale of digital assets based on daily market prices.

Registry

Organisations that manage all information relating to top-level domains.

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