Breakdown of the types of Financial markets

  1. Stock Market

This is the hub for companies looking forward to raising their capital. First, they register their shares and issue them to interested traders via an initial public offering (IPO) in the secondary market. They list the shares or stocks on stock exchanges, including NASDAQ, the New York Stock Exchange (NYSE), or OTC, a non-physical trade counter.

  1. Bond Market

It is the marketplace, allowing investors to buy bonds from companies to finance their projects. The bonds are a promise of repayment to the companies or the government purchasing them within a specified period. The companies have to pay the principal amount and interest for a complete settlement.

  1. Derivatives Market

A derivatives market is a financial marketplace where derivatives like futures and options are traded and consist of financial instruments that are used for hedging purposes or speculation by both individual as well as institutional investors. Based on trading motives, the major players in this market are hedgers, arbitrageurs, margin traders, and speculators. It deals with derivatives, which derive their value from an underlying asset. Individuals and firms can trade in futures, options, forward contracts, and swaps here. Such trades can be entered either via over-the-counter or in exchange-traded derivatives to manage the financial risk.

  1. Forex Market

The foreign exchange (Forex) market helps conduct currency trade. These markets are operated through financial institutions and are used to determine foreign exchange prices for every money.

  1. Commodities Market

A commodity market is a physical or virtual marketplace where market participants meet and buy or sell positions on commodity products like oil, gold, copper, silver, wheat, and barley. Though started with Agri commodities initially, commodity markets today trade in all commodities like base metals, gold, silver, copper, infrastructure like oil, electricity, and even weather forecasts.

  1. Cryptocurrency Market

Digital assets are trending, given the opportunities offered to investors and traders. The transactions occur and are recorded using blockchain technology. The cryptos, including Bitcoin, Ethereum, etc., are available on online crypto exchanges, letting traders participate in the trade on a global platform.