Types of Financial Markets_ A Beginner Guide

1. Types of Financial Markets: A Beginner Guide The financial markets play a crucial role in the economy's prosperity. The purchase and sale of assets such as bonds, stocks, foreign exchange, and derivatives transpire in the market. Investors and businesses raise money and enhance their savings by trading in the capital market. Every country has its version of the capital market that enables traders to buy, sell, invest, and more. The capital market is a large ecosystem of market players and specialized providers of capital market solutions. We have compiled the types of financial markets that constitute the capital markets. ● Stock Market A stock market is where registered public corporations raise capital through stocks and shares. Individual investors and organizations get the opportunity to buy the shares through the stock market trading operations. The market fluctuates based on the economic situation, perceptions, actions, and decisions of buyers and sellers. Organization and investment firms leverage high-frequency trading infrastructure to get ahead of the trading activities. The stock market fluctuations can impact the U.S and the global economies. ● The Bond Market Organizations leverage the bond market to procure loans. Typically, the bond prices decrease when the stock prices increase. Bonds are liquid and are instrumental in ensuring

2. the smooth functioning of the economy. A few types of bonds include treasury bonds, corporate bonds, and municipal bonds. The bond market plays an integral role in the capital market ecology. ● The Commodities Market The commodities market is where organizations manage their risks when dealing with natural resources. Commodities such as gold and oil are known for their price volatility. Profit is a key factor that influences commodity exchange, making them lucrative. Specifically, oil can make or break an economy. Oil can affect the price of other products and services since it is an essential commodity. The commodities market determines the price of oil. It removes the price volatility enabling the government to monitor and manage future price surges. ● Derivatives Market Derivatives are complex financial products whose value depends on the underlying assets. Hedge funds are one such asset with high-profile investors who propelled the value during their initial debut. Hedge funds and other such derivatives are risky due to their highly volatile nature. The capital market is brim with risks as well as growth opportunities. They are at the core of every country's liquidity status, allowing investors to thrive and raise capital when required. Sensiple offers capital market services that enable market players to get abreast of the financial markets.