Markets

What is a market?

  • A market is a place where people will buy or sell goods and services. There are online as well as physical marketplaces. With the advent of internet, you can buy and sell goods and services online. Stock market deals will financial products. If you would like to invest in a company, you can buy shares listed on a stock exchange. By managing an account with stockbroker, you will participate in the stock market. You can buy equities, debentures, options and various financial products by accessing your account. It is possible to buy commodities and foreign exchange as well by applying for an appropriate account.

    Financial assets

    There are different kinds of financial assets and they are dealt in a financial market. As per the market definition it includes all kinds of purchases and sales. The financial market deals with financial assets. In recent past, the ‘market’ has become a catch word to deal with the financial market. You should understand the fact that the rise or fall of price in a financial market will take place due to change in demand and supply.

    If you buy xyz stock today at $100 per share, it might be available for sale at $110 on the next day. You can buy the stock and hold it as long as you wish. You can go for short-term investment as well as long-term investment. If you hold the stock for at least one year, it can be termed as long-term investment.

    Benefits of markets

    The price of the stock will be set at the market. You will be able to make transactions by participating in the market. The participation will take place as a seller or buyer. It is possible to buy and sell financial products on the same day. You can buy shares of one business and sell the shares of another business as per your financial requirements.

    You will make gains if the buying price of the stock is lower than the selling price of the stock. It is required to calculate the inflation and other expenses that are involved in buying and selling stocks.

    Stocks markets, money markets, bond markets, derivatives market and commodities market are few examples of financial markets. Every country will have its own financial market. Some of the biggest financial markets in the world are New York Stock Exchange, London Stock Exchange and Tokyo Stock Exchange.

    If you register an account with a stockbroker, you will be able to buy and sell publicly listed securities. The new issues of stocks will be listed on a stock exchange. The trading will take place on the secondary market. The secondary market is also called as the ‘over-the-counter (OTC)’ market. The OTC market requires less regulation. Hence, the stocks that are not available on publicly traded exchanges can be bought and sold through the OTC market.

    If you go for money markets, you can deal with highly liquid financial products. The maturity value of the products will be short-term in nature. There are other markets such as bond markets, forex markets and derivative markets.