The financial market is the place where entities and people can buy and sell financial securities, commodities, currencies, etc. The prices of these assets are determined by the pure demand and supply principles. There are varied types of markets and each one is characterized by the properties of the assets traded and the needs of participants. Below mentioned are few of the markets.
Different markets to be noted
Money market- Borrowing and lending of short-term loans less than one year is conducted in the money market. This market facilitates the interaction between institutions and individuals who have surplus funds and the people who are facing a shortage of funds.
Foreign exchange market- In this market, the currencies of different countries are traded and the trade value is more than billions each day. Every country can participate in the market to trade their currency.
Cryptocurrency market- This is newly formed market wherein the digital currencies like bitcoins are traded. It is still new and is growing day by day. The best part of this market is that it works through online and there are no pre-set rules to enter the market. Crypto CFD trader can be a great use for the beginner to enter the market and do trading. The uses and its working can be understood while you read the crypto CFD trader review here.
Commodity market- The commodity market deals with hard commodities and soft commodities. They have to be physically delivered and have around 50 major markets around the world. The hard commodities include raw materials which are usually mined like oil, gold, iron ore, rubber, etc and the soft commodities include usually grown agricultural products like wheat, coffee, cotton, etc.
Derivatives market- This market facilitates the trading of financial instruments like options and futures contracts that are used to control the financial risk. Derivative instruments get their value from an underlying asset in the form of bonds, stocks currencies, mortgages and so on.
Capital market- This market helps the organizations to raise the capital for a long-term. It consists of the secondary and primary market. In the primary market, the new shares which have been created for the first time are sold and bought. In the secondary market, the investors buy and sell already issued securities like bonds, stocks, etc. It is in the secondary market, the bulk of trading occurs and the exchange where it is traded is known as the stock market.