financial markets

A financial market is a market where the trade of newly and already existing  financial assets takes place. They act as a mechanism which bring buyers and sellers of financial assets together. There are several types of financial markets which are money markets, commodity markets, derivatives markets, exchange rate markets and capital markets. In money markets securities which takes a life of one year or less are traded whilst those which have a greater life which exceeds one year upto thirty years are traded. Bonds, notes and stocks are the most common assets traded. The capital market can also be called a bond/stock market.  Derivatives markets encompass the trade of assets which derive their existence from other assets such as forwards, futures, swaps and options. Markets are also defined upon whether they have a central location or they can take place anywhere (not organized), organized markets take the form of stock exchanges such as the New York Stock Exchange(NYSE) and the Zimbabwe Stock Exchange(ZSE).Over The Counter markets are actually informal markets such as the National Association of Securities Dealers Automated Quotation(NASDAQ). The exchange rate market entails the trade of currencies between two countries to facilitate trade of goods, manpower and ideas between those countries.These kind of markets are further divided into secondary and primary markets. In the primary market there takes place the trade of newly issued assets which are for the first time finding their way into the markets and subsequently the secondary markets accommodates already existing stocks which are being traded for the second time or more than that. When dealing in these kinds of markets it is better that you first establish a better understanding of the risks involved. It i also advised to get the upto date information about all the variables characterising the markets so that it will be possible to manage a portfolio of assets.