Financial market
Financial Market
A Financial Market (pronunciation: /ˈfaɪnænʃəl ˈmɑːrkɪt/) is a marketplace where buyers and sellers engage in trade of financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.
Etymology
The term "Financial Market" is derived from the English words "financial", which refers to matters related to money and "market", which is a place where goods and services are bought and sold.
Types of Financial Markets
There are several types of financial markets, including:
- Stock Market: A market where shares of publicly held companies are issued and traded.
- Bond Market: A market where participants can issue new debt or buy and sell debt securities.
- Commodity Market: A physical or virtual marketplace for buying, selling, and trading raw or primary products.
- Derivatives Market: A market where derivatives are traded.
- Foreign Exchange Market: A global decentralized or over-the-counter market for the trading of currencies.
- Money Market: A segment of the financial market in which financial instruments with high liquidity and short maturities are traded.
Related Terms
- Securities: Represent ownership positions in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.
- Commodities: Basic goods used in commerce that are interchangeable with other goods of the same type.
- Derivatives: Financial security with a value that is reliant upon or derived from, an underlying asset or group of assets.
- Foreign Exchange: The exchange of one currency for another or the conversion of one currency into another currency.
- Liquidity: The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
External links
- Medical encyclopedia article on Financial market
- Wikipedia's article - Financial market
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