Financial markets consist of diverse participants whose interactions collectively facilitate price discovery, liquidity provision, and overall market efficiency.

Retail traders are individual investors who buy and sell securities for personal accounts. Although their transactions are typically smaller in scale compared to institutional participants, retail traders contribute to market liquidity and reflect prevailing market sentiment. Advances in digital trading platforms have significantly increased their participation and influence.

Institutional investors such as pension funds, mutual funds, insurance companies, hedge funds, and sovereign wealth funds, manage large pools of capital on behalf of clients or beneficiaries. Owing to the size and sophistication of their trades, institutional investors play a central role in asset allocation, risk management, and long-term capital formation. Their investment decisions can materially affect market prices and volatility.

Brokers act as intermediaries between buyers and sellers, executing trades on behalf of clients. They facilitate market access, provide trading infrastructure, and may offer advisory, research, and custodial services. By reducing transaction costs and information barriers, brokers enhance market participation and operational efficiency.

Market makers are specialized intermediaries that continuously quote bid and ask prices for specific securities. By standing ready to buy or sell, they provide liquidity and help narrow bid–ask spreads, thereby reducing transaction costs and stabilizing short-term price fluctuations.

Regulatory authorities oversee market activities to ensure transparency, fairness, and investor protection. Through the implementation and enforcement of rules governing disclosure, trading practices, and capital adequacy, regulators mitigate systemic risk and foster confidence in financial markets.