Article

What are the different segments of financial market?

Topic: Stock TradingPublished August 9, 2017

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Generally market is a place where buyer and seller meets for the exchange of different goods and services. Financial market is a place where traders meet for the exchange of different financial instruments like commercial bills, shares, bonds, treasury bills for short and long term. Such market plays really an important role in countries with developing economies.Broadly this market is classified in two types: Capital market and Money market . It comprises of other sub markets as well. Traders use advisory services like mcx tips and more to earn more profitable returns from market. rnFollowing are the different segments of financial market : 1) Capital market It is the market where long term funds are traded. Both individuals and institutions trades in financial securities here. Different organizations belonging to public and private sectors also sell their securities in secondary market to raise funds. Thus this market consists of primary and secondary market both. Capital market does not deal in goods and it is more concerned with raising of fund. Two major participants here are borrowers: those who demands funds and lender: those who supply fund. 2) Money market Short term funds are traded in money market. Participants here look for borrowing and lending for a short period of time which is usually overnight or some days. It is a segment of financial market where financial instruments which are highly liquid and have short term maturities are traded.Short term money requirements of the borrowers can be easily meet with funds offered by money market. 3) Commodity market Commodity market is a market where buyers and sellers meets for the exchange of different commodities. Major components of commodity market are agricultural commodities, oils and gas. These commodities are traded over two popular exchange of this market known as mcx and ncdex. Having commodities as a part of portfolio along with stocks helps in diversifying risk of overall portfolio. 4) Derivative marketrn rnThis market facilitates trading in futures and options contracts. It is named so because value here is derived from the underlying assets. Along with traders, speculators also exists here. The main reason trader prefers to trade in this market is to hedge against future price risk. Every derivative contracts has its own specification which are to be fulfilled by its holders. 5) Foreign exchange market This market is also known as forex market or currency market. This is the world's largest and most liquid market. Traders are attracted to trade here because they can earn some really good returns which is comparatively higher then returns offered by other market. Also trading in currency pairs can be done at any time of the day as it is open 24 hours a day. Major participants of this market are central banks, financial institutions, institutional investors and currency speculators. rnSo these are main segments of financial market in which traders and investors can trade to earn good returns. Always gain sufficient knowledge about segment in which you prefer to trade and avoid trading in that segment about which you do not know anything. Financial advisory services like mcx trading tips, commodity market tips, trading tips can be used as well to improve earnings from market as financial advisors with very good market knowledge give these recommendations.

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