What are the 7 Different Types of Financial Market? 

What are the 7 Different Types of Financial Market? 

The financial market is one of the most important things to every business. Financial markets are markets where parties trade financial instruments such as stocks, bonds, derivatives and currency. This market is vital to any business, so we need to understand it. In financial markets, there are different markets. These markets can divide into two types: the cash market and the derivatives market. In the cash market, a financial instrument is directly exchanged. In the derivative market, one can trade the financial instrument directly with parties. Apart from this, there are other different types of the financial market. This blog will introduce you to many types of financial markets and Matlab Assignment Help.

What is Financial Market?

People buy and sell financial assets such as stocks, bonds, insurance, and commodities on a financial market. These markets can be physical, virtual, or a hybrid of the two. The New York Stock Exchange (NYSE), for example, has a physical location where trading takes place, but you can also buy and sell on the NYSE digitally.

In other words, financial markets encompass any marketplace where securities trade. They are critical to the functioning of capitalist economies.

Moreover, the financial market of any nation is critical in allocating the limited resources available in that country’s economy. Some financial markets are very small and have little activity. Whereas others trade trillions of dollars in securities every day. Indeed, it acts as a bridge between savers and investors, mobilising funds between them.

Key Takeaways

Here are some key takeaways of the financial market, which are as follows:

  • Firstly, the financial market is a market with various financial assets such as bonds, stocks, commodities, currencies, derivatives, and so on.
  • Secondly, depending on the economy, millions of dollars are traded daily in the capital market through stock exchanges or OTC.
  • It brings together buyers and sellers to transact in their desired financial assets at a predetermined price.
  • Lastly, financial markets include stocks, bonds, derivatives, forex, commodities, and cryptocurrency.

7 Different Types of Financial Market

There are numerous financial markets, and each country has at least one, albeit of varying size. Some are small, while others are well-known around the world, such as the New York Stock Exchange (NYSE), which trades trillions of dollars daily. Here are some examples of financial markets.

Stock market

The stock market exchanges ownership shares in public corporations. Each share has a price and investors profit when the stocks perform well in the market. Additionally, it is simple to purchase stocks. The real challenge is selecting the right stocks to generate profits for the investor.

Moreover, stock markets play an essential role in the economy to gauge its overall health. It offers investors the opportunity to earn capital gains and dividend income.

Bond market

The bond market is also one of the most popular types of financial markets.

The bond market provides opportunities for businesses and governments to secure funds to fund a project or investment. Additionally, in a bond market, investors purchase bonds from a company. Besides, the company returns the bond amount plus interest within an agreed-upon period.

Corporate and municipal bonds from around the world, including in this market. However, the bond market sells all types of securities issued by the US Treasury, such as bills and notes.

Commodities market

Commodities investors and traders purchase natural resources or commodities such as oil, corn, meat, and gold. Because the price of such resources is uncertain, they have their own market. There is a commodities futures market. Additionally, the price of items to deliver at a specific future time is already identified and sealed today.

Derivatives market

Derivatives or contracts are traded in such a market. In addition, the value determines by the market value of the asset being traded. A derivative is something like a futures contract in the commodities market.

Commodity market

The commodity market is one of the best types of the financial market.

A commodity market deals with commodities such as gold, oil, wheat, rice, etc. There are approximately 50 major commodity markets worldwide.

Forex market

The foreign exchange (Forex) market facilitates currency trading. These markets are run by financial institutions and use to determine the exchange rates for all currencies.

Money market

The money market consists of trades in short-term debt investments, typically debt with maturities of less than a year. Governments and corporations use money markets to ensure consistent cash flow, while investors use money markets to make a profit.

Cryptocurrency Market

Given the opportunities available to investors and traders, digital assets are on the rise. Transactions take place and records using blockchain technology. Cryptos such as Bitcoin, Ethereum, and others are available on online crypto exchanges, allowing traders to trade on a global scale.


We hope you enjoyed our blog post on the types of the financial market. We feel it’s important to see different types of financial markets around the world and how they work. The financial market has become where people can find many services and products. The use of products and services found in the financial market in people’s daily lives. There are several different types of financial markets. The financial markets include the stock market, commodity markets, foreign exchange markets, forex markets, and more