Financial market is a mechanism that allows people to buy
and sell (trade) financial securities (such as stocks and
bonds),commodities (such as precious metals or agricultural
goods), and other fungible items of value at low transaction
costs.
Financial markets facilitate:
The raising of capital (in the capital markets)
The transfer of risk (in the derivatives markets)
International trade (in the currency markets)
Types of Financial Market
Capital markets
Stock markets
Bond markets
Commodity markets: Trading of commodities.
Money markets: Short term debt financing and investment
Derivatives markets: Instruments for the management of financial risk
Insurance markets: Redistribution of various risks
Foreign exchange markets: Trading of foreign exchange