According to economics, the financial market is a mechanism that allows individuals and entities to trade in financial securities including stocks, bonds, currencies, derivatives and commodities and many types of financial assets. The product has a substitute value with low transaction costs and prices reflecting the law of supply and demand. Both general market groups such as the New York Stock Exchange (NYSE) traded a variety of commodities and specialized markets such as the foreign exchange market that traded thousands of dollars a day.
LEARN THE DEEP ABOUT THE FINANCIAL MARKETS
Stock prices traded on the financial market may differ from the true intrinsic value of securities due to macroeconomic factors such as taxes. Moreover, the information transparency of the supply company also has a strong impact on stock prices.
A financial market that allows investors to buy and sell shares of publicly listed companies is called a stock market. The word "stock" means stock or company ownership. There are two types of stock markets: the primary market where companies issue shares to the public through initial public offering, and the secondary market where existing securities are bought by investors. sold according to news and platforms of listed companies. Capital markets are very liquid and complex compared to other financial markets.
African Market Focus
The OTC (Over-the-Counter) market is a decentralized market, not through an actual central location, where market participants deal with others through various forms of communication. such as by phone, email and proprietary electronic trading systems.The non-trading market (OTC) and the exchange market are two ways to organize the basic financial market. In the OTC market, agents play a role in creating a market by quoting prices that they will buy and sell a stock or currency. A transaction can be matched between two parties involved in an OTC market without the other party knowing the price at which the transaction is valid.
The Bond Market is a market for all types of bonds and is where organizations come to make very large loans. Normally, when stock prices go up, bond prices will go down. There are many different types of bonds, including Treasury Bonds, corporate bonds and municipal bonds. For example, a bond may be a debenture.
Money market refers to markets where financial instruments have short maturities traded. These markets help both companies and governments overcome liquidity problems in the short term, if they have liquidity surplus in the form of cash, they can buy in the money market and in the times The point that liquidity is narrowed, they can sell short-term stocks that are waiting with the company or government in the currency markets. Treasury bills, commercial papers, bank acceptance, deposits, deposit certificates, and bills of exchange are one of the tools traded in the currency market.
Derivative markets are financial instruments of value derived from the value of other assets, and therefore their value depends on the value of the underlying asset. Derivative securities are perhaps the most complex and groundbreaking products, and that is why the interest in derivatives has increased dramatically and the daily trading volume on the derivatives market has reached. trillions of dollars. Types of futures, futures, options and swaps are some good examples of derivatives used in the derivatives market.
The foreign exchange market (Forex) is the largest financial market in the world. Currencies have floating exchange rates and are always traded in pairs. Operating continuously throughout the day, the Forex market trades huge amounts of money, estimated at $ 5.1 trillion a day. Forex is a decentralized market, not through trading tables, where business activities are done via phones, computers, smartphones ... Big players in the market like corporations and commercial banks Trading, monetary centers, retirement funds and investment banks participate in Forex trading with experienced and amateur individual investors.
Different types of financial markets have different functions, and therefore all are important for the economy and the entire nation to operate smoothly