First of all, one should make it perfectly clear what a financial market is. It’s a trading facility or a group of trading facilities, where money and assets are bought and sold. The financial market consists of several segments, such as a securities market, a currency market, and so on.
Now let’s take a more detailed look at its participants. Keep in mind from the very beginning that participants will significantly differ from each other depending on the market segment.
- On a securities market, participants are represented by issuers and investors. Issuers are corporations or financial market entities that require to attract investors’funds in exchange for offered securities (company’s shares). Issuers act only as sellers. Investors are also companies or entities, which, in their turn, invest funds in different assets to get profit.
- Participants of the currency market are buyers and sellers of different currencies. This is quite all-round sector, because sellers may berepresented not only by countries, which sell their financial reserves, but by commercialbanks, enterprises, and individuals as well. Buyers are the same as sellers. Itappears that when it comes to participants, the currency market is veryflexible and mobile.
- On the credit market, there are borrowers, lenders, and intermediaries.In this case, the list of participants is bigger, but processes and procedureson this market are more complicated in most cases. Borrowers may be representedby authorities, companies, and private individuals. Lenders are the same.Intermediaries are a “layer” between them, which ensures their seamless interaction.
Among others, you may find an insurance market with its own participants and particular characteristics, a precious metals market, and many others. Markets are different and participants are various, but all of them have the same goal, which is to provide the system with finances and make these finances move inside it. Some of them borrow while others lend, but all participants of the financial market are steadily making their way towards the ultimate goal – getting profit.