What are markets?

01:17 Mins Read

This video explores the concept of markets and what they are all about.

Transcript

Markets are places where people gather to facilitate the exchange of goods and services. Some common examples of markets are grocery markets, wholesale markets, and farmers markets. Similarly, we also have financial markets. These are marketplaces where securities are traded. While the financial markets were once physical marketplaces, today, they are largely electronic. There are four main types of financial markets - the money market, the bond market, the equity market and the derivatives market. In the money market, short-term, liquid securities like treasury bills and certificates of deposit are traded. In the bond market, debt securities like bonds are traded. The equity market is where equity shares are bought and sold. And derivatives like futures and options are traded in the derivatives market. In every kind of market, liquidity is highly important. Check out the next chapter of Smart Money to learn more about this.

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