Financial markets

One of the most common ways to classify financial markets is based on their nature of operations, which can be either primary or secondary. The primary market is the place where new securities are issued and sold for the first time to the public. The secondary market, on the other hand, is where existing securities are traded among investors.

Another classification is based on the type of financial instruments being traded. For example, there is the stock market, which is a marketplace for the trading of stocks or equities, the bond market, which deals in the trading of bonds and other fixed-income securities, the commodity market, which deals in the trading of commodities such as metals, agricultural products, and energy, and the foreign exchange market, which deals in the trading of currencies.

Financial markets can also be classified based on their geographic location and type of participants. For example, there are developed markets such as the US, the EU, and Japan, and emerging markets such as China and India. Additionally, there are institutional financial markets, where trades are conducted by large financial institutions and corporations, and retail financial markets, where individuals and small investors participate in trading.

In summary, the classification of financial markets helps to better understand the various types of markets, their functions, and the participants involved. This knowledge is important for traders and investors as it can help them to make informed decisions about where and how to invest their money.

Financial markets are categorised based on different attributes.