Financial instruments refer to the tools used by both parties to finance transactions and transfer funds in the financial market. Financial instruments are divided into basic financial instruments and derivative financial instruments. Common basic financial instruments are currency, bills, bonds, stocks and so on. Derivative financial instruments are also called derivative financial instruments, such as various forward contracts, swaps, swaps, asset-backed securities and futures.
Financial market refers to the place where the fund supplier and the fund demander trade through certain financial instruments to finance funds. The main function of the financial market is to conditionally transfer the surplus funds of all social units and individuals to all social units and individuals lacking funds, so as to make the best use of their wealth and promote social development.
Because the conditions of interest rate, time and security will not satisfy both borrowers and lenders, financial institutions and financial markets have coordinated with each other to make them fit in.
Classification of financial markets:
According to terminology, financial markets can be divided into money markets and capital markets.
According to their functions, financial markets can be divided into distribution markets and circulation markets.
Financial markets can be divided into capital market, foreign exchange market and gold market according to financing objects.
According to the attributes of financial instruments traded, financial markets can be divided into basic financial markets and financial derivatives markets.
Based on geographical scope, financial markets can be divided into local financial markets, national financial markets and international financial markets.