OTHER MARKETS

Other markets are a

combination of the money and
capital markets, because they
deal with both short- and long-
term loans and securities. These
may include the following:
1. CONSUMER CREDIT MARKET

➢ Consumer credit market involves parties and

transactions related to loans granted to households
who desire to buy properties, such as cars or
appliances, travel, obtain education for themselves
or their loved ones, or other similar needs. It is called
consumer credit market because the borrowers are
the consumers.

➢ They can be short-term, like character loans, or

longer-term like car loans (usually five years), or
appliance loan(usually three years)
 2. ORGANIZED MARKETS
➢ Organized markets are the exchanges.
Exchanges, whether stock markets or
derivatives exchanges, started as physical
places where trading took place.

➢ Exchanges are situated in a certain location

with definite rules of trading. Exchanges have
members and a governing board. Members
have seats in the exchange and seat gives
the member the right to trade in the
exchange. Non-members cannot trade in the
exchange
3. OVER-THE-COUTER(OTC)
MARKET
➢ OTC markets have never been a "place."
➢ They are less formal
➢ Exchanges are far more liquid
➢ OTC market are less transparent and operate with
fewer rules than do exchange

4. AUCTION MARKET
➢ Where the trading is done by an
independent third party matching prices on
orders received to buy and sell a particular
security
 5. FOREIGN EXCHANGE
MARKETS
➢ Foreign exchange market provides the physical
and institutional structure through which the
money of one country is exchanged for that of
another country, the rate of exchange between
currencies is determined, and foreign exchange
transactions are physically completed.
TWO TIERS OF FOREIGN MARKETS
1. The Interbank Market
➢ This is the primary market where large financial
institutions, such as banks, trade currencies with each
other.
➢The interbank market operates on a global scale and
sets the exchange rates for currencies.
2. The Retail Market
➢This is the secondary market where individuals, tourists,
and small businesses exchange currencies for personal
or commercial purposes.
➢The retail market is where individuals can buy or sell
currencies through banks, exchange offices, or online
platforms
6. SPOT MARKETS
➢ Spot markets are called such because buying and
selling is done "on the spot," that is, for immediate
delivery and payment. The buyer pays
immediately and the seller delivers immediately.

7. FUTURE MARKETS
➢ unlike the spot market, future market is where
contracts are originated and traded that give the
holder right to buy something in the future at a
price specified in the contract. An agreement
involving future exchange

➢ the price prevailing at the contract maturity will be

the settlement price, whether bit goes higher nor
lower since the time the futures contract was
entered into.
TWO PARTICIPANTS IN FUTURE MARKETS:
• Speculators
• Hedger
SPECIALIST ON THE STOCK EXCHANGES
• Professional Traders
• Long position
• Day traders
• Scalper
8. FORWARD MARKET
➢ Forward market is the market that is used to
determine the price of forward contracts,
financial instruments, and assets, as well as
to sell and buy them. The trading of
instruments takes place on such a market.
The forward market allows contract parties
to customize the time, amount, and rate at
which the contract is to be performed.
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9. OPTION MARKETS
➢ The options market is a derivative market that is traded in contracts.
It is a contract between a buyer and seller, that gives the purchaser
of the option the right, but not the obligation, to buy / Sell a specific
stock at a specific price on or before a specific date.

There are two types of options:

1. Call Option: gives the buyer the right to buy the stock at a set price
on or before a set date.

2. Put Option: gives the buyer the right to sell the stock at a set price on
or before a set date.
 10. SWAP MARKET
➢ Swaps are agreements between two parties (counterparties)
in exchanging specified periodic cash flows in the future based
on an underlying instrument or price (e.g., a fixed or floating
rate on a bond or a note). Like forward, futures, and options,
swaps allow firms to better manage their interest rate, foreign
exchange, and credit risks. The swap market is where swaps
are traded.

There are five general types of swaps:

a. Interest rate swaps
b. Currency swaps
C. Credit risk swaps
d. Commodity swaps
e. Equity swaps
11. THIRD AND FOURTH MARKETS
The third market comprises OTC transactions
between broker-dealers and large institutions.

The fourth market is made up of transactions

that take place between large institutions.

123 Anywhere St., Any City

TYPES OF INVESTORS:
1. Risk-averse investors (bulls and chicken). They are the type of investors
who, when faced with two investment alternatives with equal returns but
one is riskier than the other, will choose the less risky investment.

2. Risk-taker investors (bears and pigs). They are the investors who are
ready to pay a higher price for an investment regardless of the risks
involved.

3. Risk-neutral investors. They are investors who do not, take into account
the risks involved in the investment and who are focused only on the
expected returns
123 Anywhere St., Any City
THANK YOU
FOR YOUR ATTENTION