Describe the various types of financial markets and the types of transactions supported by each market in the U.S. and globally.

Finance | FIN 350 – Financial Markets and Institutions | Strayer University

The various types of financial markets are the primary and secondary markets, with each market offering different types of transactions. The primary market is where new securities such as stocks and bonds are first issued and traded through direct negotiations between buyers and sellers. This type of trading typically takes place directly between large institutions or corporations that can afford to purchase high volumes of securities. On the other hand, the secondary market involves trading existing securities between investors; this is generally done through brokers on organized exchanges such as the New York Stock Exchange (NYSE). Financial instruments traded in this market include stocks, bonds, commodities, futures contracts, options, mutual funds, etc.

In addition to these two markets there also exist global markets which allow for cross-country investments due to their international scope. These may include exchanges like NASDAQ or London Stock Exchange (LSE) which provide a platform for companies from all over the world to issue stock in order to raise capital or trade existing securities among investors. 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.