What Are The Different Types Of Securities Market?

What Are The Different Types Of Securities Market?

What Are The Different Types Of Securities Market?

Security market is a market where securities are issued and traded. It is the market for different types of securities namely: Debt, Equity and Derivatives.

Debt market is further divided into three parts:

  • Government securities market

It deals with tradeable debt instruments issued by the Government for meeting its financing requirements. … The government securities market is also regarded as the backbone of fixed income securities markets as it provides the benchmark yield and imparts liquidity to other financial markets.

  • Money market

The money market is defined as dealing in debt of less than one year. It is primarily used by governments and corporations to keep their cash flow steady, and for investors to make a modest profit. The capital market is dedicated to the sale and purchase of long-term debt and equity instruments.

  • Corporate Debt market

What is the Debt Market? A.The Debt Market is the market where fixed income securities of various types and features are issued andtraded. Debt Markets are therefore, markets for fixed income securities issued by Central and State. Governments, Municipal Corporations, Govt.


Equity market is divided into two parts:

  • Primary market

The primary market is the part of the capital market that deals with the issuance and sale of equity-backed securities to investors directly by the issuer. … Primary markets create long term instruments through which corporate entities raise funds from the capital market. It is also known as the New Issue Market (NIM).
  • Secondary market

A secondary market is a platform wherein the shares of companies are traded among investors. It means that investors can freely buy and sell shares without the intervention of the issuing company. … Income in this market is thus generated via the sale of the shares from one investor to another.

Derivatives market is also divided into two parts:

  • Options market

Options are a type of derivative product that allow investors to speculate on or hedge against the volatility of an underlying stock. Options are divided into call options, which allow buyers to profit if the price of the stock increases, and put options, in which the buyer profits if the price of the stock declines.

  • Futures market

A futures market is an auction market in which participants buy and sell commodity and futures contracts for delivery on a specified future date. Futures are exchange-traded derivatives contracts that lock in future delivery of a commodity or security at a price set today.

Examples of futures markets are the New York Mercantile Exchange (NYMEX), the Kansas City Board of Trade, the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBoT), Chicago Board Options Exchange (CBOE) and the Minneapolis Grain Exchange.


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