Types of Financial Markets, General Description and CharacteristicsIf you have any questions or suggestions you are welcome to join our forum discussion about Types of Financial Markets. Join The Forum. A financial market is a market in which people and entities can trade financial securities, commodities and other fungible assets at prices that are determined by pure supply and demand principles. Markets work by placing the two counterparts, buyers and sellers, at one place so they can find each other easily, thus facilitating the deal between them. Financial markets may be viewed as channels through which flow loanable funds directed from a supplier who has an excess of assets toward a demander who experiences a deficit of funds. There are different types of financial markets and their characterization depends on the properties of the financial claims being traded and the needs of the different market participants.
A stock market , equity market or share market is the aggregation of buyers and sellers a loose network of economic transactions, not a physical facility or discrete entity of stocks also called shares , which represent ownership claims on businesses; these may include securities listed on a public stock exchange , as well as stock that is only traded privately. Examples of the latter include shares of private companies which are sold to investors through equity crowdfunding platforms. Stock exchanges list shares of common equity as well as other security types, e. Stocks are categorized in various ways. One way is by the country where the company is domiciled. Apart from the Australian Securities Exchange , these 16 exchanges are based in one of three continents: North America, Europe and Asia.