WHAT ARE THE TYPES OF FINANCIAL MARKETS?
Market, in common words, means a place where goods/ services are bought/ sold/ supplied between buyers and sellers, with or without intermediaries. Financial Market means a market where financial instruments are bought and sold between buyers and sellers, and usually involves an intermediary.
In India, there following are the types of financial markets:
- Stock Markets
This is the most popular financial market where stocks of companies which are listed, are traded on a regular basis. It is usually governed by the Stock Exchange Board of India (SEBI) and the main players are the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange)
- Over the Counter Markets
Here, trading is done between the buyer and the seller directly, without the involvement of a Stock Broker/ intermediary.
- Bond Market
As the name suggests, bond market is a market where bonds (a type of debt instrument) are traded as bills and notes. They are usually issued by Central and State Government bodies, Municipal Corporations, etc.
- Money Market
Here, trading is done between the organizations and traders and usually short-term instruments are traded in the Money Market. The interest rate is comparatively cheaper.
- Derivatives Market
In the derivatives market, a contract is signed between two or more parties for dealing in the derivative instruments. Derivative Instruments derive their value from the underlying assets and they do not have any value of their own.
- Forex Market
Foreign Exchange Market (Forex Market) deals with currencies of foreign denominations. Forex Market has the highest liquidity among all markets in the world.
These are some of the many types of Financial Markets in India. Stakeindia, the oldest Stock Market/ Share Market Teaching Institute in Nashik, Maharashtra; which is primarily involved in teaching the students about the market and trading in the same. Get in touch with us at stakeindiainstitute@gmail.com
