Introduction to financial markets

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Financial Markets
‡ ‡ ‡ ‡ ‡ ‡ ‡
Bond Markets Stock Markets Foreign Exchange Markets Commodity Markets Money Markets Spot Markets Over the counter markets

Bond Market
‡ Also known as debt, credit or
fixed income markets« ‡ Bond market usually refers to the government bond market because of its size, liquidity and lack of credit risks.

Stock Market
‡ Pension funds, insurance
companies, mutual funds, index funds, exchangetraded funds, hedge funds, investor groups, banks and various other financial institutions

Foreign Exchange Markets
Foreign exchange market is unique because of Its trading volumes, The extreme liquidity of the market Its long trading hours: 24 hours a day except weekends

Commodity Market
‡ It covers physical product
(food, metals, electricity) markets but not the ways that services, including those of governments, nor investment, nor debt, can be seen as a commodity

Money Market
‡ The core of the money
market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments.

Spot market
‡ Spot market can operate
wherever the infrastructure exists to conduct the transaction ‡ The spot market for most securities exists primarily on the internet

Over the counter market
‡ An over-the-counter
contract is a bilateral contract in which two parties agree on how a particular trade or agreement is to be settled in the future. It is usually from an investment bank to its clients directly

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