The short version
- A share is part-ownership of a company, a currency trade is an exchange rate, and a crypto coin is an entry on a public ledger.
- Shares trade on a few regulated exchanges in set hours; forex runs through dealer networks five days a week; crypto trades nonstop across many venues.
- Leverage caps, custody rules and settlement times differ sharply, and those differences decide how much can go wrong.
Financial markets explained well start with a single question: what exactly changes hands when you press buy? The answer is different for shares, currencies and crypto, and almost every other difference between them, from opening hours to the risk of losing more than you put in, follows from it. This guide asks the same handful of questions of each market and puts the answers next to one another.
What you are actually buying
A share is a slice of legal ownership in a company. It entitles you to a portion of the profits, which may be paid as dividends, and usually a vote. Its value is ultimately tied to what the business earns.
A currency trade is an exchange of one national money for another at an agreed rate. Nothing is produced or earned by holding euros instead of dollars, apart from any interest difference, so the price is a relative one: the value of one money measured in another.
A crypto-asset is a record on a shared digital ledger. Some are designed as money, some give access to a network, and stablecoins such as USDT try to track a traditional currency. Most have no cash flow of their own.
On top of all three sit derivatives: contracts whose value follows a price without transferring the asset itself. Futures and contracts for difference (CFDs) are the two that retail readers meet most often, and both usually involve leverage.
Where the trading happens
Shares are listed on regulated exchanges such as the New York Stock Exchange, Nasdaq or the London Stock Exchange. Each exchange runs a central order book, and in the US a set of rules links the venues so that orders are routed towards the best displayed price.
The currency market has no central exchange. Banks and dealers quote prices to one another over electronic networks, and retail traders reach it through a broker that either passes orders on or takes the other side itself.
Crypto trades on hundreds of separate platforms worldwide, each with its own order book. That is why the same coin can show slightly different prices on different venues at the same moment. Trades can also happen directly on a blockchain through decentralised exchanges.
Opening hours, measured
The clearest way to see how different these markets are is to count the hours each one is open in a normal week.
Those gaps matter. News that breaks while an exchange is shut is absorbed all at once when trading resumes, so the first price of the day can sit well away from the previous close. Crypto has no such pause, which is one reason it often reacts first to weekend events. The live market board on our homepage shows which venues are open as you read.
Who stands between you and the market
| Question | Shares and ETFs | Forex | Crypto |
|---|---|---|---|
| Usual intermediary | Licensed stockbroker | Forex broker or CFD provider | Crypto exchange, or your own wallet |
| Who holds the asset | A custodian or nominee, separated from the broker's own money | Usually no asset: you hold a contract with the broker | The exchange's wallets, unless you withdraw to your own |
| If the firm fails | Client assets ring-fenced; compensation schemes in many countries | Client money rules; limited compensation in some countries | Protection varies widely and is often absent |
| Typical retail leverage | None for cash accounts; 5:1 cap on share CFDs in UK/EU | Up to 30:1 on majors in UK/EU/Australia, 50:1 in US | 2:1 cap on crypto CFDs in the EU; UK retail ban on crypto derivatives |
When you check any provider, the questions in our guide on how to choose a broker apply to all three markets.
Leverage and the protections around it
Leverage lets a small deposit control a much larger position. Regulators in the UK, EU and Australia cap it for retail clients because losses scale with it: at 30:1, a 1% move against a position equals 30% of the margin behind it. The same regimes require brokers to close positions when an account's margin level falls to 50% and, in the UK and EU, stop retail CFD accounts from going below zero. Crypto platforms outside these regimes may offer far higher leverage with none of those safeguards. Our margin calculator shows the collateral any leveraged position ties up.
Settlement: when a trade is really finished
Pressing buy agrees a price; settlement is when ownership and money actually swap. US shares settle one business day after the trade (T+1), a change made in May 2024. Spot currency deals between banks traditionally settle two business days later, although retail forex positions are usually rolled over each night instead. A transfer on a blockchain settles once it is confirmed in a block, often within minutes, while a trade inside a crypto exchange is just an update to its internal records until you withdraw.
How the three markets pull on each other
These markets are separate but not independent. Interest-rate expectations move currencies and share valuations at the same time. A stronger US dollar reduces the value of overseas profits for American multinationals and can weigh on assets priced in dollars, including many crypto-assets. In a sharp sell-off, investors often sell riskier holdings across the board and buy the dollar, the yen or government bonds. Reading one market is easier when you know what the other two are doing, which is the idea behind the five checks on our homepage.
Reader questions
Which market is best for a beginner?
No market is best for everyone. Many long-term investors start with broad, low-cost index funds because they spread risk across many companies and need no leverage. Leveraged forex and crypto trading carry much higher risk of fast losses.
Why do share prices jump at the open?
Exchanges are closed overnight, so news that arrives while they are shut is priced in all at once when trading resumes. The opening auction sets the first price, which can be some distance from the previous close.
Is forex traded on an exchange?
Mostly not. Spot forex is traded over the counter between banks and dealers. Currency futures do trade on exchanges, but most retail forex happens through brokers and CFD providers.
Sources
- US Securities and Exchange Commission, T+1 settlement cycle
- UK Financial Conduct Authority, CFD and crypto-derivative rules for retail clients
- European Securities and Markets Authority, CFD product intervention measures
- Exchange trading-hour pages: NYSE, Nasdaq, LSE, Deutsche Börse Xetra, JPX, HKEX, ASX, NSE