What are Financial Markets? What are the Basics you should know?

Financial markets can be defined as the place where money is traded. In simple word we can say that financial markets help the lenders and borrowers to exchange money according to their requirements.
The financial markets can be classified in various ways as follows:

Primary and Secondary Markets:

•  Primary markets are the markets where new securities are issued or which deals with financial claims.
• Secondary markets deal with the securities which are already issued.

Regulated and Non Regulated Markets:

• Regulated markets are the markets which are organized and function under the observation of the financial regulators. In India the financial regulators are RBI, SEBI, Ministry of Finance.
• Non regulated markets are the markets which are not governed by any regulation. These can be the exchange between two individuals outside the structured and organized atmosphere and also without any agreements.

Over the Counter(OTC) and Exchange Traded Markets:

These are the type of secondary markets.

• When the trade take place with the help of a middleman like brokers or dealers is called over the counter (OTC). Here the broker or the dealer by the product and hold the risk related to the product. Stocks , currency , commodities are all trade over the counter. Stocks are not traded over the counter in India and some countries.
• The market where trade takes place on pre determined rules and regulations are called Exchange traded market.