What financial instrument markets are there?
What financial instrument markets are there?
Stock market
Shares represent a portion of a company's capital. Stock trading is conducted on stock exchanges, where a business seeking to raise capital must list/register by offering investors to buy its newly issued shares. The registration on the stock exchange is done through the so-called initial public offering of shares. There are around 250 stock exchanges operating worldwide, with the largest in terms of trading volume being the New York Stock Exchange.
Bond market (debt market)
Bonds represent securities trough which companies, governments, and other institutions that issue them attract funds in the form of debt – meaning they are debt instruments. Trading with bonds is conducted in the debt market, with the largest in the world in terms of volume being the one in the USA.
The foreign exchange market
The foreign exchange market is the largest and most liquid financial market in the world, with a daily turnover of around 4 trillion U.S. dollars. Global trading of national currencies operates 24 hours a day from Monday to Friday. It is most commonly referred to as Forex, from the English 'Foreign exchange'.
Commodities Market
The global commodities market operates through specialized exchanges where metals (gold, silver, etc.), oil, and food (wheat and grains) are traded through standardized contracts. Through these financial instruments, which can be futures or forward contracts, the purchase or sale is agreed upon for a specific date in the future at a specified price at the current moment. The moves of commodity prices are crucial for determining the consumer prices of essential daily goods such as fuels and grains. Producers use futures contracts for hedging against poor harvests of the commodity they produce.