Financial Market

Financial market in the economics is said to be mechanism which allows a person to sell and buy financial-securities (like bonds, stocks and shares), some other sort of fungible goods which possess value and commodities like precious stones or metals or agricultural products at very low and cut to cut cost of transaction as well as at the rates which reflect efficient hypothesis of market.

Both specialized-market where trading is done on only a single commodity as well as general-markets where trading is done on various commodities exist. Work of market is done through placing of many sellers and buyers in a single place, there by making easy for sellers and buyers in finding out each-other. Market economy is that economy relying primarily upon the interactions in between sellers and buyers for allocating resources in the contrast to command-economy / to non market-economy like gift-economy.

In the finance what is facilitated by the financial-market are stated below:

In capital-market, the capital's raising.
In derivatives-market, the risk's transfer.
In money-market, the liquidity's transfer.
In currency-market, trading is done world wide or international-trade.
Used in communicating all those people are in need of capital with those people who are having enough of it and want to lend.

Typically, receipt is issued to a lender by the borrower promising for paying back borrowed capital.

Such receipt work as a security which can be sold or bought freely. The borrower has to pay compensations to the lender as in interest form or dividend form against the fund that is borrowed by him.

Financial market is of various types which are further having subtypes.

They are mentioned below:
Capital-market – It comprises of following subtypes:

Stock-markets – This market provides finance through shares issuance or common-stock issuance there by enabling subsequent market for fund.
Bond-market – This market provides finance through bonds issuance and there by enabling subsequent market for fund.

Markets for commodity or commodity-market – This type of market facilitate commodity's trading.
Money-market – Such form of market provide debt investment and financing for short period.
Derivatives-market – Such type of market provides the instrument used for managing financial-risk.
Future-markets – This type of market provides forward-contract of high standard for the trade of products. The trading is done for some date from future.
Insurance-market - This sort of market facilitates many risks's redistribution.
Foreign-exchange-market - Such markets provides facility in trading foreign-exchange.