Finance

The term Financial markets can be a cause of much confusion.

Financial markets could mean:
1. organisations that facilitate the trade in financial products. i.e. Stock exchanges facilitate the trade in stocks, bonds and warrants.
2. the coming together of buyers and sellers to trade financial products. i.e. stocks and shares are traded between buyers and sellers in a number of ways including: the use of stock exchanges; directly between buyers and sellers etc.
In academia , students of finance will use both meanings but students of economics will only use the second meaning.
Financial markets can be domestic or they can be international.
In economic a financial market is a mechanism that allows people to easily buy and sell financial securities(such as stocks and bonds),commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction cost and at prices that reflect efficient market.

Financial markets have evolved significantly over several hundred years and are undergoing constant innovation to improve liquidity Both general markets, where many commodities are traded and specialised markets (where only one commodity is traded) exist.

• Markets work by placing many interested sellers in one "place", thus making them easier to find for prospective buyers. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non market economy that is based, such as a gift economyIn Finance,
  

Financial markets facilitate:

• The raising of captial (in the capital market);


• The transfer of risk (in the derivative market);


• Internation trade (in the currency market).