What is Financial Market
A monetary desire may be a word that describes a marketplace where bonds, equity, securities, currencies are traded. Few financial markets do a security business of trillions of dollars daily, and a few are small-scale with less activity. These are markets where businesses grow their cash, companies decrease risks, and investors make additional cash.
Meaning of monetary Markets
A Financial Market is mentioned as space, where the selling and buying of monetary assets and securities happen. It allocates limited resources to the nation’s economy. It exists as a characteristic between the investors and collector by mobilising capital between them.
Types of Financial Markets?
Financial Markets -Types, and Functions
1.Over the Counter (OTC) Market – They manage the public stock market, which isn’t listed on the NASDAQ, American stock market, and any stock market. The over-the-counter market handling companies are usually small companies that will be traded in cheap and have less regulation.
2.Bond Market – A financial market may be a place where investors loan money bonds as a security for a group time at a predefined rate of interest. Bonds are issued by corporations, states, municipalities, and federal governments across the planet.
3.Money Markets – They trade high liquid and short maturities, and lending of securities that matures in but a year.
Derivatives Market –They trades securities that determine the worth for his or their primary asset. The derivative contract value is regulated by the market value of the first item — the derivatives market securities, including futures, options, contracts-for-difference, forward contracts, and swaps.
4.Forex Market – it’s a financial market where investors trade currencies. within the entire world, this is often the foremost liquid financial market.
Functions of monetary Market
there are some important functions of the financial
1.It mobilises savings by trading it within the most efficient methods.
2.It assists choose the securities price by interacting with the investors and counting on the demand and provide within the market.
3.It gives liquidity to bartered assets.
Less time-consuming and cost-effective as parties don’t need to spend time and money to seek out potential clients to affect securities.4 It also decreases cost by giving valuable information about the securities traded within the financial market.
Classification of monetary Market
“The financial market is often classified into different forms.”
naturally of Claim
1.Debt Market – it’s a market where fixed bonds and debentures or bonds are exchanged between investors.
Equity Market – it’s an area for investors to affect equity.
By Maturity of Claim
2.Money Market – It deals with monetary assets and short-term funds like a certificate of deposits, treasury bills, and cash equivalent, etc. which mature within twelve months.
Capital Market – It trades medium and future financial assets.
By Timing of Delivery
3.Cash Market – it’s a marketplace where trade is completed in real-time.
Futures Market – Here, the delivery or compensation of products are taken within the future specified date.
By Administrative Structure
“Over-the-Counter Market – it’s a decentralised organisation with customised procedures”
4.Exchange-Traded Market – it’s a centralised system with a patterned procedure.