Financial market instruments

1.

Financial market
instruments

2.

Financial market
• The financial market is an ecosystem in which values are exchanged for money and vice
versa. Financial markets are different, but they all have one thing in common — they
exchange capital in compliance with state-established norms or international laws.

3.

• At the same time, the exchange of capital
can take place both within one country and
beyond its borders. Therefore, there is a
distinction between national and
international financial markets. If the
national is regulated by the legislation of a
particular country, then international rules
come to the rescue in transactions
between countries.

4.

Types of financial markets
1. Money markets
One of the simplest operations in the financial system, which has been familiar to everyone
since childhood, is the transfer of money into debt. Money markets are built on this. However,
they have an important limitation — this is the loan term. Short-term deals are made in the
money markets. These are usually bank consumer loans, credit cards, microloans, short-term
debt securities such as bonds.
Under normal conditions in the money markets, all participants find themselves in an
advantageous position. Lenders receive a percentage of the loan, borrowers receive capital
that they can invest in other transactions, and intermediaries work for a commission from
transactions.

5.

Money market instruments include
• interbank loans,
• commercial loans,
• certificates of deposit,
• savings certificates,
• bills of exchange,
• government short-term securities.

6.

Capital markets
• It covers long-term transactions. It is clear from the name that such markets operate with
the aim of creating capital — a large gradual steady profit.
• For this purpose, instruments such as dividend stocks, long-term bonds, long-term loans
such as mortgages
dividend stocks - дивидендные акции, long-term bonds - долгосрочные облигации

7.

Stock markets
• Anyone knows where to buy and sell stocks: on the stock exchange. But this is far from the
only possibility. The exchange is just one of the sites, but it is also the largest. Stocks,
bonds and derivatives can also be sold through brokers or directly. These are called overthe-counter markets.
• Exchanges are the most regulated platforms for trading securities. They are controlled by
supervisory authorities, and the exchanges themselves seriously monitor the quality of
assets and the reliability of issuers. The over-the-counter market is not so strictly regulated.

8.

The foreign exchange
market
Forex
• The name is an abbreviation of Foreign
Exchange, that is, the exchange of foreign
currencies. In fact, these are all sites where the
purchase and sale of banknotes takes place.
Due to the fact that almost all economically
active inhabitants of the Earth use money, and
many of them somehow exchange one currency
for another, Forex is the largest financial market
that does not have a central platform.
Transactions can be concluded directly between
participants, on specialized platforms, within the
framework of an exchange or in banks.

9.

The key players in Forex are:
• the central banks of the countries, they issue their banknotes, monitor how the currency
behaves in the foreign and domestic markets, and may even try to adjust its exchange rate;
• however, the main movement of currencies passes through banks, and the largest number of
transactions are concluded here;
• There are also national currency exchanges that regulate exchange rates for individuals at the
national level;
• funds, companies and individuals contribute to the circulation of currencies.
Transactions in the foreign exchange markets are conditionally divided into spots (bought and
immediately received) and urgent (bought and received by a pre-agreed deadline).

10.

The commodity market
• Usually, physical goods are traded in such
markets: products (including agricultural
products, such as grain, tea, salt),
resources (such as oil, gas, coal) and
metals (such as gold). As with securities
and currencies, transactions can be
concluded in the spot format, that is, with
immediate delivery, but more often with
deferred delivery on the futures market.

11.

The main instrument of any financial market is an agreement between the lender and the
borrower, the purpose of which is to service the transaction. A financial instrument is an
object of purchase and sale in the financial market that accompanies any movement of funds
from the lender to the borrower.

12.

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listening