Markets

Reviewed by Annapoorna | Updated on Sep 30, 2020

Introduction

Markets are a place or platform where both buyers and sellers meet to sell or buy goods or services. Most commonly, the term market also refers to the platform where shares and securities are traded between interested investors. In most of the countries, various markets are regulated by the Government by implementing rules, terms and conditions, but markets may also be present for illicit trading.

Understanding Markets

The transactions carried out in the market may involve goods, services, information, currency, or any combination of these between parties. The markets can be having a physical location like the vegetable market or can range to virtual markets such as e-commerce websites. Out of the various types of markets, a financial market is where the securities, currencies, bonds, and other securities are traded. It can be a useful place to raise capital for the business by various corporate entities.

It can be either money market for short-term maturity or capital market for a long term maturity. The next type of market is the auction market where the interested bidders gather to topple each other by calling out the highest price for various goods auctioned. A black market is a type of cash market where transactions are carried out illegally without the knowledge of the Government and out of legal boundaries.

Factors to consider before you invest

  1. Markets operate by a combination of demand made by buyers and supply created by the seller. It helps determine the price of the goods or services traded in the market.
  2. In a perfect competition scenario, there is a high volume of buyer and seller activity. It ensures a right balance between supply and demand, thereby keeping the price of the product at its minimal within the market.
  3. Markets can be categorised at an international, national, regional or local level. Further, it can be a developing market or a developed market depending upon the economy and income levels of the nation.

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