Sandy Smith
New Member
A market where entities as well as people can trade not only commodities but also financial securities as well as other similar assets at prices that are determined by only supply and demand principles is known as a financial market. Markets work in such a way that the buyers and sellers can be at one place where they can find each other easily. This helps them in closing the deal with great ease. As there are various types of instruments that are traded, depending on these types, the markets are given names. Here, some of the financial markets are discussed in detail. (Information credit: easyMarkets).
1. Capital market
In the capital market, capital is raised on a long-term basis. In this market, there are two parts, namely the primary and the secondary market. Again, there are two subgroups in which the capital market is divided. They are the stock market and the bond market. The stock market is the market where the ownership of a company is shared through stocks issuing and trading and this market provides finance. The bond is the market where finance is provided by accumulating debt through bond trading and bond insurance.
A primary market, commonly known as the “new issue market” is a financial market where securities like bonds and shares are not only created but also traded for the first time. Also, no intermediary such as an exchange is used in the process.
A secondary market, commonly known as the “aftermarket”, is a financial market where investors purchase securities that are previously used such as stocks, futures, options and bonds from other investors and not from the issuing companies themselves.
2. Commodity market
In the commodity market, trading of primary products is managed. There are two subgroups in which you can divide the commodities. They are hard commodities and soft commodities. The typically mined raw materials are known as hard commodities, for example, oil, rubber, iron ore, gold and many more. On the other hand, the typically grown agricultural primary products are known as soft commodities, for example, coffee, sugar, wheat, cotton etc.
3. Foreign exchange market
The foreign exchange market is the market that helps in trading foreign exchange. In terms of liquidity, this market can be regarded as the largest financial market in the world where more than 5 trillion dollars are traded on a daily basis. Individuals, countries, government banks, other banks or any company can take part in this trading. This is the market that stays open 24 hours a day and 5 days a week.
4. Derivatives market
You can trade financial instruments such as futures contracts in the derivatives market. This market can help in controlling financial risk. Generally, the instruments derive their value from the value of an underlying asset. There are different forms in which the underlying asset can come in, for example, stocks, bonds, mortgages and currencies.
As there are many financial markets, you get to choose from more than one option and make lots of money.
1. Capital market
In the capital market, capital is raised on a long-term basis. In this market, there are two parts, namely the primary and the secondary market. Again, there are two subgroups in which the capital market is divided. They are the stock market and the bond market. The stock market is the market where the ownership of a company is shared through stocks issuing and trading and this market provides finance. The bond is the market where finance is provided by accumulating debt through bond trading and bond insurance.
A primary market, commonly known as the “new issue market” is a financial market where securities like bonds and shares are not only created but also traded for the first time. Also, no intermediary such as an exchange is used in the process.
A secondary market, commonly known as the “aftermarket”, is a financial market where investors purchase securities that are previously used such as stocks, futures, options and bonds from other investors and not from the issuing companies themselves.
2. Commodity market
In the commodity market, trading of primary products is managed. There are two subgroups in which you can divide the commodities. They are hard commodities and soft commodities. The typically mined raw materials are known as hard commodities, for example, oil, rubber, iron ore, gold and many more. On the other hand, the typically grown agricultural primary products are known as soft commodities, for example, coffee, sugar, wheat, cotton etc.
3. Foreign exchange market
The foreign exchange market is the market that helps in trading foreign exchange. In terms of liquidity, this market can be regarded as the largest financial market in the world where more than 5 trillion dollars are traded on a daily basis. Individuals, countries, government banks, other banks or any company can take part in this trading. This is the market that stays open 24 hours a day and 5 days a week.
4. Derivatives market
You can trade financial instruments such as futures contracts in the derivatives market. This market can help in controlling financial risk. Generally, the instruments derive their value from the value of an underlying asset. There are different forms in which the underlying asset can come in, for example, stocks, bonds, mortgages and currencies.
As there are many financial markets, you get to choose from more than one option and make lots of money.