Different types of Financial Markets

1. Stock Market. This is the most common types of financial markets. These are the venues where
companies list their shares and they are bought and sold by traders and investors within a listed
exchange, such here in the Philippines, the Philippine Stock Exchanges (PSE). Stocks are shares
ownership of a public corporations. Stock markets are used by companies to raise capital via initial
public offering (IPO) with shares subsequently traded among various buyers and sellers known as
secondary market. In IPO the corporation sells sharedirectly to investor and they receive the money
directly. Whereas in secondary market the shares transaction is between the investors and usually they
would sell it a price higher than they purchase it.

2. Bond Market. When a company or government needs to raise very large amount of loans, they would
offer a bond. A bond is a security in which an investor loans money for a defined period at a pre-
established interest rate. The Philippine government also issued a bond through the Bureau of Treasury
and it is called Treasury Bond. This finances priority projects of the government.

3. Forex Market. It is a financial market where the investor trade in currencies. This is the most liquid
financial market. It is a decentralized global market in which currencies are traded. To start trading all
you need to do is open an account within a platform and fund your account.

4. Derivative Market. This markets trade securities that determine its value from its primary asset. The
derivative contract value is regulated by the market price of the primary item. It includes, futures
contract, options, forward contracts and swap.

5. Commodities Market. Commodities markets are venues where producers and consumers meet to
exchange physical commodities such as agricultural products (e.g., corn, livestock, soybeans), energy
products (oil, gas, carbon credits), precious metals (gold, silver, platinum), or "soft" commodities (such
as cotton, coffee, and sugar). Many investors trade in commodities for profit only. For example, the price
of gold is volatile or changes rapidly within a specified period, traders within the commodities market
can “lock-in” the price of gold base on today’s market price.

6. Cryptocurrency Market. For the past several years, cryptocurrency such as Bitcoin and Ethereum have
gain popularity from various investors. This is a decentralized digital assets that are based on blockchain
technology. Today there are hundreds of cryptocurrency available and traded globally. Because the
majority of crypto exchanges are centralized platforms, users are susceptible to hacks or fraud. In the
Philippines, you can buy and sellcryptocurrency in Coins.Ph safely.
III. ACTIVITIES

1. For your activity, choose one from the different types of financial market and write an essay or article
about how you can earn from it and how you can protect yourself from scams within the market