Capital Market

What is the Capital Market?

In the realm of Trading, a vital term to understand is the Capital Market. The Capital Market is a subset of the financial market where long-term debts, or equity-backed securities, are bought and sold. Capital Markets are crucial platforms that sustain the smooth functioning of the economy. They offer companies, government institutions, and other organizations an avenue to raise funds long-term.

The Two Components of Capital Market

Capital Markets are split into two primary parts: the primary market and the secondary market. The primary market is where new shares are issued to investors. In contrast, in the secondary market, investors trade already-issued securities without the involvement of the issuing companies.

Capital Market and Trading

In the context of Trading, Capital Markets provide a stage for the exchange of securities. Traders take on the role of either buyers or sellers, seeking profit from the buying and selling of securities. As such, Capital Markets indeed form an integral part of the trading system and have an active impact on how trading is conducted.

Role of Capital Market in Economy

The Capital Market plays a major role in supporting the economic growth of a country. It aids by creating a channel between savers and companies that require capital for operations. Thus, playing a key role in the function of both individuals and organizations.

Wrap Up

To sum it all up, the Capital Market facilitates the buying and selling of long-term financial securities. It's a key cog in the financial sector that helps businesses and government organizations to muster funds, and traders to make profits from trading these securities. Therefore comprehending Capital Markets is essential to succeed in the domain of Trading.