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Pricing in the world financial market. Plan Essence Types of FM Bond market in RT Global currency market Pricing in the gold market.

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Presentation on theme: "Pricing in the world financial market. Plan Essence Types of FM Bond market in RT Global currency market Pricing in the gold market."— Presentation transcript:

1 Pricing in the world financial market

2 Plan Essence Types of FM Bond market in RT Global currency market Pricing in the gold market

3 A financial market is a market in which people and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goodstradesecuritiescommoditiesfungibletransaction costssupply and demand

4 The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (like the NYSE, BSE, NSE) or an electronic system (like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spinoff) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchangestock exchangecommodity exchangeNYSE, BSE, NSENASDAQcorporate actions

5 Types of FM Within the financial sector, the term "financial markets" is often used to refer just to the markets that are used to raise finance: for long term finance, the Capital markets; for short term finance, the Money markets. Another common use of the term is as a catchall for all the markets in the financial sector, as per examples in the breakdown below

6 Types Capital markets which consist of: Capital markets – Stock markets, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof. Stock marketscommon stock – Bond markets, which provide financing through the issuance of bonds, and enable the subsequent trading thereof. Bond marketsbonds Commodity markets, which facilitate the trading of commodities. Commodity markets Money markets, which provide short term debt financing and investment. Money markets Derivatives markets, which provide instruments for the management of financial risk. [1] Derivatives marketsfinancial [1] Futures markets, which provide standardized forward contracts for trading products at some future date; see also forward market. Futures marketsforward contractsforward market Insurance markets, which facilitate the redistribution of various risks. Insurance markets Foreign exchange markets, which facilitate the trading of foreign exchange. Foreign exchange marketsforeign exchange

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8 The currency market includes the Foreign Currency Market and the Euro-currency Market. The Foreign Currency Market is virtual. There is no one central physical location that is the foreign currency market. It exists in the dealing rooms of various central banks, large international banks, and some large corporations. The dealing rooms are connected via telephone, computer, and fax. Some countries co-locate their dealing rooms in one center. The Euro-currency Market is where borrowing and lending of currency takes place. Interest rates for the various currencies are set in this market

9 The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. In terms of volume of trading, it is by far the largest market in the world. [1] The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currenciescurrencies [1]Financial centres

10 Gold Market The market for buying and selling gold, which can be traded as bullion, as coins, or in the futures and forward markets.


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