Sunday, 22 April 2018

Financial Market - Money and Capital Market

Financial Market:

Financial Market is the mechanism that allows people to trade financial securities, like bonds, shares, etc.., 

Functions of Financial Markets:

  • Enlistment of economy and conducting them into most dynamic use.
  • Makes possible price detection
  • Give liquidity to financial possessions
  • Decrease price of transaction      
  • The Financial Markets can be divided into two types. They are

Ø  Money Market
Ø Capital Market

Money Market:

Money market is a market of debt securities,like treasury bills. It facilitates issuance and trading of short term non equity debt instruments,like treasury bills,commercial papers,certificates of deposit,etc,

Capital Market:

Capital Market/Stock Market is a market for long term debt and equity shares. In this market both debt and equities are traded. Capital Market can be divided into 2 types. They are

Ø  Primary Market
Ø  Secondary Market

Primary Market is the segment in which securities are offered to public,for investment.Through this platform corporate raise capital for further development of their ventures.

Secondary Market is the segment in which the listed securities are traded. It provides a platform for people to buy and sell shares,bonds and debentures etc. So this platform is perfect for raisin money,and for investors to participate in the growth of companies through various investment options available in the market.
In India, there are many regional stock exchanges through which shares of listed companies are bought and sold. Apart from the regional stock exchanges,there are two main exchanges on which most of the trades are done.
Ø  BSE (Bombay Stock Exchange)
Ø  NSE (National Stock Exchange)

It is the very oldest stock exchange not only in India but also in Asia. It was the first exchange to receive recognition from Indian Government.
BSE Online Trading (BOLT) facilitates online screen based trading in securities. BSE  reaches to over 400 cities across over India.


NSE commenced its operations in Wholesale Debt Market (WDM) in April 1994 and in Capital Market ( Equities) Segment in June 1994. It formed first clearing corporation (NSCCL), which carries out clearing and settlement of trades executed in equities and derivative segments. Since it has evolved to be the highest volume generating exchange in India. It has widest network of terminal across in India. They are also provider online trading facilities through internet.

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