Market is a place where two parties interact to for a
transaction of purchase and selling of either goods or services.
These parties are called buyers and sellers. The market could be a
physical outlet on geographic location, like retail stores or it
could be a virtual one like online market like Amazon where no
physical contact is made between the parties.
- Physical asset markets versus financial asset
markets,
Markets the deal with physical assets
are called physical asset market and market that deal with
financial assets are called financial asset markets. The main
difference in both the assets is explained below:
- Physical assets are tangible assets that can be seen and
touched versus financial assets are intangible so that can’t be
seen or felt.
- Although both of these assets reflect in balance sheet,
physical assets depreciates whereas financial assets don’t lose
their value due to wear and tear, they majorly loss their value due
to market change.
- Example of physical asset is gold, silver, equipment’s, land,
buildings, et, whereas, financial assets include stocks, bonds,
goodwill’s, etc.
- Spot markets versus futures markets,
- Spot market, also known as cash market is where assets are
bought and sold for cash and delivered at the same time , whereas
future market is a market where future contract is being made
between buyer and seller to make buy and sell in the future period
at a specified rate and time, the delivery is not immediate.
- Spot market solely works on demand and supply of the product,
whereas future market works on the future price, market
predictions, cost predictions, etc.
- Money markets versus capital markets,
- Money market is a market where banks and financial institutions
trade in short term instrument like trade credit, commercial paper,
T bills, etc., whereas capital market is where instruments like
stock, debentures and bonds are traded for a longer period of
time.
- The main difference between the money market’s asset and
capital markets asset is that money market is used to trade asset
for a period of 1 year or less whereas capital market is used for
asset s traded for a longer period of time.
- Money market is dealt by banks and financial institutions,
whereas in capital market the dealing is done among individuals
like stock brokers, underwriters and also institutions like
banks.
- The assets in money market are highly liquid whereas the assets
in capital market are comparatively less liqui
- Primary markets versus secondary markets,
- Primary market is a new issue market , where a new security is
offered to the public, whereas in secondary market, the already
issued securities are bought and sold.
- In primary market there is an issuer and buyer and the security
is purchase directly from the issuer, but in secondary market
security is bought from either seller, stock exchange or
broker.
- Initial public offering (IPO) is an offering of primary market,
whereas purchasing of any company’s stock from stock exchange is
secondary market offering.
- Public markets versus private markets.
- In public market the selling of shares is to the general
public, where the shares could be purchased by anyone, whereas in
private market, the shares are sold to professional investors.
- The buyer in public market is general public, whereas in
private market, they are investors like venture capital firms or
private equity firms
- There is higher regulation in public market compared to private
market.