Is the branch of financial economics that investigates trading and the organization of markets
Instruments
Includes, common stocks, preferred stocks, bonds, covertible bonds, warrants, options, futures contracts, forward contracts, foreign exchange contracts, swaps, reinsurance contracts, commodities, pollution credits, water rights, and betting contracts.
Market
Is the place where traders gather to trade instruments. Maybe a physical trading floor like the New York Stock Exchange; or an electronic system in which traders can easily communicate with each other like Nasdaq, the Euronext, the Hong Kong Futures Exchange.
Brokers
Agents who arrange trades for their clients. They help their clients find traders who are willing to trade with them. They profit by charging commissions.
Speculators
are traders who trade to profit from information they have about future prices. Well-informed speculators can predict futures prices better than other traders can. They then choose to buy or sell based upon which side they expect will be profitable.
Information Asymmetries
Traders who know more about values and traders who know more about what other traders intend to do have a great advantage over those who do not