FIN 350 – Financial Markets and Institutions | FIN 350 – Financial Markets and Institutions | Strayer University
With each market offering different kinds of transactions, there are two main types of financial marketplaces: the primary and secondaries markets. This is the primary market where new securities, including stocks and bonds, are initially issued. It also allows for direct negotiation between sellers and buyers. This kind of trading is usually conducted directly between corporations or large institutions that have the financial resources to buy high volumes. The secondary market, on the other hand involves the trading of existing securities among investors. This is usually done by brokers at organized exchanges like the New York Stock Exchange (NYSE). Stocks, bonds and commodities are all traded on this market. Futures contracts, options, option, mutual funds, stocks, and other financial instruments can also be traded.
There are also global markets that allow investments across borders. Exchanges such as the NASDAQ and London Stock Exchange (LSE), which allow companies to trade securities or raise capital, can be used to facilitate cross-border investments. Additionally, currency markets such as foreign exchange (FX) provide an avenue for individuals/institutions to speculate on currency movements while hedging against risk by limiting exposure via forward contracts or swaps.