Financial Market

In the field of economics the financial market can be defined as a mechanism which empowers people to trade with financial securities or other objects of value.

In finance financial markets make it possible to raise capital, transfer the risk and liquidity as well as international trade. This market is the medium for joining people who have capital to those that want to have capital.

Types of financial markets

For an exact image of this subject it is necessary to divide the financial market into different types. They are described in the following:

• Capital markets are composed of stock markets and bond markets. They enable financing and trading.
• Commodity markets provide the trading of commodities.
• Money markets deal with debt financing and investment.
• Insurance markets enable reallocation of different risks.
• Foreign exchange markets deal obviously with the trading of foreign exchange.

Financial market slang

For working in the financial market you will need a specific language to communicate. A few examples are presented below:

The expression “Poison Pill” is used, when an enterprise deals with a higher number of shares to thwart the takeover by another business venture.

A “quant” is a person that is a quantitative analyst with a Doctor of Philosophy degree, or higher, in mathematics and statistics.

The term “rocket scientist” describes a financial consultant that is exhausting his mathematical and programming abilities.

A company in a corporate take-over bid is called “white knight”. This business venture buys diverse shares of an organization or institution to thwart a contested takeover.