Financial Market

A financial market is a marketplace where buyers and sellers engage in the trading of financial assets, such as stocks, bonds, currencies, and derivatives. These markets facilitate the exchange of capital and liquidity in the economy, allowing investors to acquire securities to gain ownership or rights to future cash flows. Financial markets can be categorized into primary markets, where new securities are issued, and secondary markets, where existing securities are traded among investors. They can also be classified as organized markets, which follow structured regulations and operate on exchanges, or over-the-counter markets, where trading occurs directly between parties without a centralized exchange. Financial markets play a crucial role in price discovery, risk management, and the allocation of resources in the economy, impacting businesses, governments, and consumers.