US Capital Markets

A Quick Glance at the Financial Markets

The securities market is divided into seven primary sectors, many of which have multiple names.

  1. The Stock or Equity Market.
  2. The Bond or Fixed Income or Debt Market .
  3. The Currency or Foreign Exchange Market.
  4. The Derivatives Market.
  5. The Commodities Market.
  6. The Money Market.
  7. The Real Estate Market.


Stocks, bonds, mutual funds, hedge funds, and many other financial instruments are traded in these markets. This next survey will present the various markets and a few of the more popular financial instruments.

The Stock Market (Chapter 2)

More than ten thousand firms trade their stock in the American stock market. Most of them are American, but a few foreign companies are also listed. These corporations are traded in a number of different markets. The largest of these is the New York Stock Exchange. The more prominent stock indices, such as the Dow Jones Industrial Average, and the NASDAQ draw the attention of investors around the globe.

The Bond Market (Chapter 4)

Four main types of bonds that are traded:

  • Corporate Bonds.
  • Federal Bonds.
  • Municipal Bonds.
  • Mortgage Backed Bonds.

The Currency Market

Currencies from across the world are traded here. The Dollar, Yen, Euro, British Pound, and others can all be exchanged. This market was established in the 1970’s when the majority of countries in the world allowed their currency to be traded freely. It is estimated that trade in the world currency market exceeds a value of 1.5 trillion dollars a day.

The Derivatives Market (Chapter 9)

The derivatives market began to develop in the 1970’s as well. The term derivative includes a wide variety of financial instruments. The most prominent of these are:

  • Options.
  • Futures.

 

The Commodities Market

Dozens of commodities, from gold, silver and other precious metals, all the way to flour, coffee, sugar and apple juice, are traded here. The trade is spread out across many different exchanges, each one specializing in a particular type of commodity.

The Money Market

Short term bonds issued by the federal government and by major corporations are exchanged in this market.

The Real Estate Market (Chapter 7)

Activity in the US real estate market is strongly connected to the securities market. In the past few decades, financial instruments have been developed that allow small investors to get involved in financing development and to own productive resources.

 

A Quick Glance at the Financial Markets528A Quick Glance at the Financial Markets