Financial Market Participants

Financial market participants are the entities that buy, sell, or hold financial instruments within a market. They include individual investors, institutional investors, brokers, market makers, and regulators. Each participant plays a distinct role, contributing to the market's overall function. For example, institutional investors manage large sums of money, while market makers provide liquidity by buying and selling assets. The interaction of these participants ensures the smooth operation of financial markets.

Example

Institutional investors, like pension funds, buy large blocks of stocks to meet their long-term investment objectives, while market makers facilitate these trades by providing liquidity.