The term "market" issometimes used for what are more strictly exchanges, organizations thatfacilitate the trade in financial securities, e.g., a stockexchange or commodity exchange. This may be a physicallocation (like the NYSE) or an electronic system (like NASDAQ). Muchtrading of stocks takes place on an exchange; still, corporateactions (merger, spinoff) are outside an exchange, while any two companiesor people, for whatever reason, may agree to sell stock from the one to theother without using an exchange.

Trading of currencies and bondsis largely on a bilateral basis, although some bonds trade on a stock exchange,and people are building electronic systems for these as well, similar to stockexchanges.

Financial markets can be domesticor they can be international. Types offinancial markets

The financial markets can bedivided into different subtypes:

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

The capitalmarkets consist of primary markets and secondarymarkets. Newly formed (issued) securities are bought or sold in primary markets.Secondary markets allow investors to sell securities that they hold or buyexisting securities.