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A financial market is a platform or system of economic exchange. Markets play a fundamental economic role as a means for trading currency, assets, securities and financial instruments. Each market may include institutions, infrastructure, systems, policies, procedures, regulations and a set of social conventions. The following are common examples of markets.
StocksA market for buying and selling stocks that represent ownership interest in a business. Stock markets also typically trade certain types of securities such as exchange traded funds that implement a variety of investment strategies.BondsMarkets for issuing new debt or buying and selling existing debt securities. Many bond markets are over-the-counter meaning that they rely on a dealer network as opposed to an exchange.
DerivativesA financial market for trading contracts such as futures, options and credit default swaps. Includes both exchanges and over-the-counter markets.Foreign Exchange MarketA decentralized market for trading currencies. The largest market in terms of trading volume with mostly large financial institutions participating.Commodity MarketMarkets for commodities such as energy, metals and agricultural products. It is common to bet on the prices of commodities without taking delivery with a variety of derivatives.
Money MarketTrading in short-term debt instruments such as treasury bills, commercial paper, certificates of deposit, bills of exchange, repurchase agreements, federal funds and asset-backed securities. Real Estate MarketThe market for real estate primarily involves agents that represent buyers and sellers. ReinsuranceA market for insurance purchased by insurance companies. A method for transferring risk.
Finance
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