The financial market most of people are confused with this term, Then you don’t require to, As financial market goes by a lot of terms including wall street , capital market, even the markets, a few people just say it’s a stock market, but they are really referring to , shares, stock commodity and , bonds .
It is very easy type of financial transaction that you help grow your business and make more profit for you is financial market that is in easy terms.
In a short financial market is a place where 2 people are involved in transaction of services and goods in exchange of money
The 2 people involved are:
In a financial market the seller and buyer come on a regular platform, where the purchaser buys goods and other hand services from the seller in exchange of money.
Here are show you what different kind of Financial Markets.:-
Investing Stocks and Shares Market
Stocks and Shares are placed where most of people invest money for a longer term i.e. More than 1 year is called as capital market. In capital market different financial institutions take money from individual persons those are investing in the capital market for the long term
Further capital market expands into two:-.
1. Primary Market-
Primary Market is a type of capital market where companies issue fresh stock, bonds and shares to investors in the form of Initial Public Offering (IPO s). Primary Market is a form of market where stocks and securities are issued for the first time by organizations.
2. Secondary Market-
The secondary market is a type of capital market where securities and stocks which have been before issued are sold and bought.
Types of Capital Market:
1. Stocks Markets-
The stock market is a kind of capital market which are dealing with the trading and issuance of stocks and shares at a definite price. Most people appreciate that a stock market is a place where shares are sold and bought, and in spirit this is right. Most people appreciate a stock market is dominated by investors or traders who speculate on the share price to build a profit on the difference b/w the selling and buying price, and in spirit this is right. But a stock is much more in-depth than these 2 basic rules would suggest, and needs some depth analysis to get to the bottom line of what’s actually going on
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3. Commodity Markets-
The commodities are goods that are usually used as inputs in the production of other services and goods. Prices of commodity are determined mainly by demand and supply interactions in the global marketplace. Demand and Supply conditions may be affected by different factors like the geopolitical events, weather and supply-side shocks (e.g., Wars, hurricanes). A few examples of usually traded commodities are energy products like natural gas and oil, agricultural products like coffee, sugar and soybean. And metals like copper, gold and nickel, Commodities show attractive risk-return profile. Commodities not only offer an excellent way to diversify a portfolio of bonds and stocks, they often offer superior returns. According to a technical and fundamental Study, Since 1959, commodities futures have produced good yearly returns than outperforming bonds returns and stocks returns even more During the 1970s, futures in commodities outstanding performance stock; during the 1980s the exact opposite was right – support of the “negative correlation” between commodities and stocks that lots of of us have noticed.
The better returns on commodities futures “completely correlate” with inflation. Maximum commodity prices were mainly a wave of high prices in common (i.e., inflation), and that’s why better returns of the commodity do superior in inflationary times, while bonds and stocks perform the returns on stocks in companies that formed the similar commodities.
4. Money Markets-
The money market engages individuals who deal with the borrowing and lending of money for a short time frame. The money market is specific from capital market on the basis of the credit instruments, maturity period and the institutions:
- Maturity Period
- Credit Instruments
- Nature of Credit Instruments
5. Derivative Markets
The Derivatives Market is destined as the market where derivatives exchange takes place. Derivatives are single type of securities whose stock price is derived from the assets of underlying. And worth of these derivatives is determined by the volatile in the assets of underlying. These assets of underlying are most usually currencies, stocks, bonds, interest rates, market indices and commodities. As Derivatives are just contracts b/w two or more parties, anything like amount of rain or weather data can be used as underlying assets. The Derivatives can be classified as Options, Future Contracts, Swaps, Credit Derivatives and Forward Contracts.
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6. Future Markets
The future market is a kind of financial markets which deals with the stock market trading of financial instruments at a exact rate where in the delivery takes place in future.
8. Foreign Exchange Markets (Forex Market)
The Forex Market (Foreign Exchange market) as it is oft called is the market in which currencies are traded. The currency Trading is the world’s biggest market consisting of approximately trillion in daily volumes and as trader or investors learn more and become more interested in this market, the market carry on to quickly grow. Not only is the forex market the biggest market in the world, but it is also the most liquid, this is totally different from the other markets. In addition, there is no middle marketplace for the currency exchange, but in its place the investing or trading is conducted over-the-counter. Different the stock market, this decentralization of the market allows investor or traders to select from many different dealers to make trades with and permits for comparison of prices. Typically, the bigger a dealer is the superior access they have to pricing at the biggest banks in the world, and that are able to pass on to their clients. The spot the currency market is open 24 hrs a day, 5 days a week, with currencies being traded around the world in the all major financial center.
9. Private Markets
It’s also a important market also known as private market is a form of market where transaction of financial products takes place b/w two parties directly.
10. Mortgage Market
In most of countries market, a mortgage is the key method that future homeowners have of purchasing a house, land or flat on which to make a property, together called real estate. This type of mortgage is called a home loan or residential mortgage. They are most often taken up by couples or individuals. The payment is made to the individual concerned on submitting assured essential documents and fulfilling certain basic criteria.