A Map of Financial Markets: Stocks, Forex, Commodities, Crypto

Picture a big supermarket. One aisle has fresh produce, another has dairy, another has snacks. Each aisle has its own products and its own shoppers, but they all sit under one roof, and when something big happens, like a storm that delays deliveries, every aisle feels it.

Financial markets work exactly the same way. In this article we'll take a walk through this "big supermarket" together, so you can see what each aisle sells, why it matters to you, and how it connects to the rest.

First, a simple question: what is actually traded?

Two kinds of things:

• The asset itself: a share of a company, a currency, a gold coin or a bitcoin.
• A contract on the price of that asset: here you never get the thing itself; you trade on whether its price goes up or down. These contracts are called derivatives, because their price is "derived" from, meaning taken from, the price of something else.

Keep this simple split in mind. The rest of the map is built on it.

The stocks and indices aisle

When you buy a share of a company, you own a small piece of it. If the company grows, the value of your share usually grows too.

An index is a basket of stocks that shows the overall mood of a market. The S&P 500, for example, tracks five hundred large US companies, and the Nasdaq leans heavily toward tech companies.

Why should you care? Even if you never trade stocks, indices work like a thermometer. When the big US indices drop, it usually means the whole market is nervous.

The forex aisle (currencies)

Forex means trading currencies against each other, for example the euro against the dollar (EURUSD). You're always comparing one currency with another.

It's the biggest market in the world. According to the Bank for International Settlements (BIS), about 9.6 trillion dollars a day was traded in currency markets in April 2025. Even more interesting: the dollar was on one side of about 89 percent of all currency trades, so almost every trade has the dollar in it.

Why should you care? The currency market is open around the clock for about five days a week, and economic news hits it fast.

The commodities aisle

Commodities are basic goods that are the same everywhere in the world: gold, silver, oil, gas, wheat and copper.

• Gold is seen by many people as a safe place to hide when they're scared.
• Oil is connected to almost the whole economy: transport, factories and the price of lots of everyday goods.

Why should you care? Moves in gold and oil often send an important message about the economy and about fear in the market.

The crypto aisle

Crypto means digital currencies like Bitcoin and Ether. This market is open 24 hours a day, 7 days a week, and it usually swings much more than other markets: it goes up fast and comes down fast.

Why should you care? Big opportunity, big risk. If you're new, practise with very small size.

Derivatives: futures, options and CFDs

Now for the contracts. They aren't a separate product; they're another "door" into the same aisles.

Futures

The US Commodity Futures Trading Commission (CFTC) describes a futures contract as an agreement to buy or sell something on a set date in the future, with the price and amount fixed today. Think of it as a pre-order. Futures trade on exchanges and have a fixed size and date. Fun fact: most futures contracts are closed before the delivery date, so many traders never want the goods at all; they just trade the price.

Options

Investor.gov explains that an option gives the buyer the right, but not the obligation, to buy or sell an asset at a set price within a set time. Think of it as a deposit: you pay a small amount to keep the right to buy. If you change your mind, you only lose that deposit.

CFDs

A CFD is a contract between you and your broker that only swaps the price difference. You don't own the gold or the share; you just get the profit or loss from the price change. It usually comes with leverage, which means you control a bigger position with a small amount of money.

A serious warning: the European Securities and Markets Authority (ESMA) reported that national regulators found 74 to 89 percent of retail CFD accounts lost money. The main reason: high leverage. That's why Europe put limits on CFD leverage.

Practical example: one asset, four doors

This example is hypothetical and the numbers are simplified.

Say gold is at 2,000 dollars an ounce and you think it will rise. You have four options:

• Buy real gold: you pay 2,000 dollars and get one ounce. If the price rises 1 percent to 2,020, you make 20 dollars, which is 1 percent of your money.
• Gold CFD with 1:10 leverage: for the same ounce you only put up 200 dollars as margin. The same 20 dollar gain is now 10 percent of your money. But if the price falls 1 percent, you lose 10 percent of your money. Leverage makes both sides bigger.
• Gold futures: like a CFD, you trade the price, but on an exchange with a standard contract. Each contract is usually bigger and needs more capital.
• A gold call option: you pay, say, 15 dollars as a deposit for the right to buy at 2,000. If gold is at 2,020 at expiry, that right is worth 20 dollars and you've made 5. If gold falls, the most you lose is those 15 dollars.

See? The product is the same, but the risk and the money you need are different behind each door.

How the markets connect: all under one roof

This is the most important part of the map. The aisles aren't separate:

• The dollar sits in the middle of everything. With the dollar in 89 percent of currency trades, anything that moves the dollar moves the whole currency market. Gold is priced in dollars too, and the World Gold Council says gold has historically tended to move against the dollar.
• Derivatives are shadows of the main market. Futures, options and CFD prices come from the price of the underlying asset. So whatever moves gold or an index also moves these contracts.
• Crypto isn't an island anymore. The International Monetary Fund (IMF) showed that the correlation between Bitcoin and the S&P 500 was almost zero in 2017 to 2019 (0.01) but rose to 0.36 in 2020 and 2021. In plain words: when the stock market gets scared, crypto now tends to fall along with it more than before.

One important point: correlation is not a fixed rule. The crypto example itself shows that these relationships change over time. Use them to understand the market better, not to predict it.

Common mistakes

• Starting with the most complex market: many people jump into options or high-leverage CFDs on day one without understanding the market underneath.
• Underestimating leverage: leverage doesn't only make profits bigger; it makes losses just as big.
• Watching only one market: you trade gold but have no idea what the dollar is doing.
• Thinking crypto has nothing to do with the rest: IMF data shows the link has grown stronger.
• Hopping from market to market: a new market every week means you never learn any of them properly.

Practical checklist

• I've picked one main market to start with and I know its busy hours.
• I know whether I'm trading the asset itself or a contract on its price.
• If I use leverage, I know what a 1 percent price move means for my account.
• I keep an eye on one or two related markets (for example the dollar when trading gold).
• Before every trade I know my maximum loss.

Frequently asked questions

Which market is best to start with?

There's no single answer. Pick a market whose hours fit your life, whose trading costs are low and whose information is easy to find. Then stay focused on it.

What's the difference between a CFD and futures?

Futures trade on an exchange with standard contracts. A CFD is a contract between you and your broker. In both you trade the price, but transparency, costs and contract size are different.

Do I need to know every market?

No. It's enough to know your own market well and to know which other markets affect it.

Why are derivatives called derivatives?

Because they get their value from another asset. The price of a gold option comes from the price of gold, not from anywhere else.

Wrapping up

The financial market is one big supermarket with several aisles: stocks, currencies, commodities and crypto. Derivatives are different doors into those same aisles. Most importantly, the aisles are connected, and the dollar, the market's fear and greed, and big news travel from one to the others like a draft of air.

In the next articles we'll open up each aisle on its own, in simple words. If you want to move faster, check out the free courses and take a look at the pro tools in software.

Adapted from: BIS, CFTC, Investor.gov, ESMA, IMF and World Gold Council

Trading involves a significant risk of loss. This article is for education only and is not financial advice.