Financial Markets

Financial markets refer to platforms and systems that facilitate the buying and selling of financial instruments, such as stocks, bonds, currencies, and derivatives. These markets are crucial for the allocation of resources, determining prices of securities, and providing liquidity. Financial markets can be categorized into primary markets, where new securities are issued, and secondary markets, where existing securities are traded among investors. They play a vital role in the economy by enabling companies to raise capital, allowing investors to grow their assets, and providing mechanisms for risk management through hedging and speculation. Financial markets can operate through various structures, including organized exchanges and over-the-counter (OTC) markets. The overall health and efficiency of financial markets are critical for economic stability and growth, influencing interest rates, inflation, and investment patterns.