6449624 28.01.2021 A trader reflects in a display as he works at home, in Moscow, Russia. Vladimir Pesnya / Sputnik (Photo by Vladimir Pesnya / Sputnik / Sputnik via AFP) NAIROBI, Kenya, March 8 – Many traders or intending participants in the international financial market confuse the forex market and stock market for the same thing. Such misunderstanding stems from ignorance of what both entails and their place in the financial market.
The forex market is a place where currencies of different countries are traded for profit while the stock market is a place where shares of a company) are bought and sold.
In Kenya, the Capital Markets Authority is responsible for regulating the activities of the forex and stock markets. They protect investors from nefarious brokers and also set and enforce the rules guiding activities of the forex and stock markets.
The Nairobi Securities Exchange (NSE) is the exchange where investors buy and sell stocks of companies in Kenya. This Exchange is prominent in Kenya and is mostly dominated by Kenyan investors.
If you are a prospective trader or investor, then it is important to understand the differences between forex and stocks before venturing into active trading of these financial instruments. This understanding will help you in choosing the instrument that you are most comfortable trading with and which best suits your interest.
These points below will provide a detailed analysis of the differences between forex and stock markets. Difference between Forex and Stocks
The differences between forex and stocks range from the instrument itself, trading hours, factors that affect their price fluctuations, liquidity, volatility etc.
> The Instruments
The forex market deals with trading the different currencies, whereas the stock market has to do with investing in stocks or shares of companies.
Most business owners want to raise capital by selling off fractions of their business to the public. This fraction is known as shares. By doing this, they open up the ownership of the business to the public. Investors who buy the company shares are called shareholders. These shareholders share the profit of the company in what is called dividends. Shareholders also bear the risks of the company because if the company declares a loss, they don’t get paid dividend.
Investors in Kenya can invest in the equities listed on the NSE &traders can trade derivatives on the listed instruments.In theforex market, investors, speculators, banks & various parties participate for different […]