Market is a broad market where buyers and
sellers exchange various types of financial
securities or products that comprise financial
securities. Financial Markets serve various
purposes to a variety of individuals and
corporations. Such markets facilitate Investment
and purchase of assets. They also facilitate
handling of various risks. The financial
market can be divided into different subtypes:
Capital markets consists of:
Stock markets, which
facilitates equity investment and buying
and selling of shares or common stock.
Bond markets, which provides financing
through the issue of debt
Contracts and the buying and selling
of bonds and debentures.
Money markets, which provides short
term debt financing and investment.
Derivatives markets, which provides
instruments for handling of financial
market, which provide standardized
contracts for trading assets at some
forward date; see also forward market.
Insurance markets, which facilitates
handling of various risks.
Foreign exchange markets
Financial market data provides information
about the financial
markets can be either primary markets
or aftermarkets. Newly formed securities
are bought or sold in primary markets.
Secondary markets allow owners of the
security or the product of securities
to buy or sell the same.
Capital Market is the market for long-term
loans and equity capital. Companies and
the government can raise funds for long-term
investments via the capital market. The
capital market includes the stock market,
the bond market, and the primary market.
The government monitors securities trading
on organized capital markets; new issues
are approved by authorities of financial
supervision and monitored by participating
Stock Market is a market for the trading
of publicly held company stock and associated
financial instruments (including stock
options, convertibles and stock index
futures). Traditionally such markets
were open-outcry where trading occurred
on the floor of an exchange. These days
increasingly the markets are cyber-markets
with buying and selling occurring via
online real-time matching of orders
placed by buyers and sellers.
years ago, worldwide, buyers and sellers
were individual investors and businessmen.
These days markets have generally become
"institutionalized"; that is, buyers
and sellers are largely institutions
whether pension funds, insurance companies,
mutual funds or banks. This rise of
the institutional investor has brought
growing professionalism to all aspects
of the markets. There are stock markets
in most developed economies, with the
world's biggest markets being in the
USA, Japan, and Europe.
Market, the market in which bonds are
traded before their maturity. If interest
rates decline after a bond has been
issued, the value of bonds already issued
with higher rates of interest will rise,
and hence the bond market is said to
be “up.” A rise in interest rates will
lower the value of bonds issued with
lower rates of interest and send the
bond market “down.”
Money Market is a general term for the
markets in which banks lend to and borrow
from each other, trade financial instruments
such as Certificates of Deposit (CDs)
or enter agreements such as Repos and
Reverses. The market normally trades
in maturities up to one year. It provides
short to medium term liquidity in the
global financial system. Derivatives
of the money market include forward
rate agreements (FRAs) and futures.Trading
takes place between banks in the "money
centres" (New York and London primarily,
also Chicago, Frankfurt, Paris, Singapore,
Hong Kong, Tokyo, Toronto, Sydney).
Derivatives Market is any market for
a derivative, that is a contract which
specifies the right or obligation to
receive or deliver future cash flows
based on some future event such as the
price of an independent security or
the performance of an index. Derivatives
markets can be standardized or non-standardized.
One derivatives market is for standardized
stock options, a market where parties
can buy or sell, call or put options
on a secondary market. Non-standardized
derivatives instruments, such as naked
warrants issued directly by financial
institutions to a secondary market,
Markets, which facilitates handling
of various risks. In insurance, the
insured makes payments called "premiums"
to an insurer, and in return is able
to claim a payment from the insurer
if the insured suffers a defined type
of loss This relationship is usually
drawn up in a formal legal contract.
one classic example of insurance, a
ship-owner insures a ship and receives
payment if the ship is damaged or destroyed.
This example is one of the earliest
uses and developments of concepts like
insurance. Interestingly, ships are
now more often insured through risk
pooling and spreading organizations
such as Lloyd's of London because the
loss of a large ship going down is too
great for one insurer to accept.
companies earn investment profits, because
they have the use of the premium money
from the time they receive it until
the time they need it to pay claims.
This money is called the float. When
the investments of float are successful,
they may earn large profits.
After Market (also called secondary
market) is the financial market for
trading of already issued securities.
In the secondary market, securities
are sold by and transferred from one
investor to another. It is therefore
important that the secondary market
be highly liquid and transparent. The
eligibility of stocks and bonds for
trading in the secondary market is regulated
through financial supervisory authorities
and the rules of the market place in
question, which could be a stock exchange.
Stockbrokers see the secondary market
as the retail part of their business.
They are dealing with many clients and
many relatively small transactions.
This can be contrasted with the primary
market in initial public offerings,
which can be seen as the wholesale side
of their business.
Primary Market is the financialmarket
center for the initial issue and placement
of securities. Unlike in the secondary
market, no organized stock exchanges
are necessary. Securities dealers see
this as the wholesale part of their
business. This process of selling the
new stock issues to prospective investors
in the primary market is called underwriting.
The securities that they sell are called
initial public offerings (IPOs). Dealers
usually earn a commission that is built
into the price of the security offering,
that is, it is not apparent unless you
read the prospectus in detail.
Market is an important constituent of
the financial market of any country.
It is the market where a wide range
of products, viz., precious metals,
base metals, crude oil, energy and soft
commodities like palm oil, coffee etc.
are traded. It is important to develop
a vibrant, active and liquid commodity
market. This would help investors hedge
their commodity risk, take speculative
positions in commodities and exploit
arbitrage opportunities in the market.
Foreign Exchange Markets are usually
highly liquid particularly in the G7
currencies (USD, JPY, EUR, CHF, GBP,
CAD, AUD). The main international banks
continually provide the market with
both bid (buy) and ask (sell) offers.
The volume of trading in the foreign
exchange markets exceeds that in any
other market, liquidity is extremely
the foreign exchange markets there is
little or no 'inside information'. Rate
fluctuations are usually to do with
world economy or the national economies
so significant news is released publicly
so, at least in theory, everyone in
the world receives the same news at
the same time. Big foreign exchange
trading centres are located in New York,
Tokyo, London, Hong Kong, Singapore,
Paris and Frankfurt amongst others.
Categories of banking
of international finance