Financial market
From The Art and Popular Culture Encyclopedia
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A financial market is a market in which people trade financial securities, commodities, and value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural products.
In economics, typically, the term market means the aggregate of possible buyers and sellers of a certain good or service and the transactions between them.
The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (like the NYSE, BSE, LSE, JSE) or an electronic system (like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spinoff) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchange.
Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange, and people are building electronic systems for these as well, similar to stock exchanges.
See also
- Finance capitalism
- Financial services
- Financial instrument
- Financial market efficiency
- Brownian Model of Financial Markets
- Investment theory
- Quantitative behavioral finance
- Mathematical finance
- Stock investor
- Financial Market Theory of Development
- Liquidity
