Which market is involved in trading securities such as stocks?

The equity market is the correct answer because it specifically refers to the marketplace where stocks or shares of publicly traded companies are bought and sold. In this market, investors participate in trading ownership stakes in companies, which can increase or decrease in value based on the company’s performance and overall market conditions.

The equity market is a fundamental component of the broader financial system, contributing to capital formation and allowing companies to access funding by selling ownership equity to investors. This market encompasses not just individual stock transactions, but also the trading of Exchange-Traded Funds (ETFs) and other equity-based investment vehicles.

In contrast, the debt market involves the trading of fixed-income securities like bonds, the futures market focuses on contracts to buy or sell assets at a future date at predetermined prices, and the derivatives market involves financial contracts whose value is derived from the performance of underlying assets, which can include stocks, but is not specific to trading those stocks directly.