Types Of Financial Markets

Financial markets are highly diverse but may be classified into several broad categories Few of them are.

  1. Money Markets:- The Money Markets are financial markets for short term debt instruments.The Money market is decentralized market but considerable money market activity occurs an New York. The primary participants an the  money market are financial institutions,government units, and business firm. Money market degree of safety and maturities of one year or less.
  2. CAPITAL MARKETS:- These are the Financial markets in which intermediate and long term instruments are bought and sold. Capital markets are more centralized then money markets and major participants include corporations, Government and individuals capital market securities include both debt and equity.
  3. PRIMARY MARKETS:- Are the financial markets in which newly issues securities are bought and sold for the first times.The issuing company receives the proceeds form the sales of the security less and relates costs of the issue.Most new securities or other investments directly to a limited number of investors are sold through either a public offering or private placement
  4. SECONDARY MARKETS:- These are the financial markets in which previously issues securities are bought and sold secondary markets are resale markets and are not used for corporate fund raising Thus corporations receive no money from the sale of securities in secondary markets secondary markets for corporate securities are either organized exchange or over the counter (OTC) markets.