Share Market & Financial System.
                     Share Market & 
Financial System
WHAT IS SHARE MARKET?
• A share market is where shares are either issued or traded in. A 
share market only allows trading of shares. 
• The key difference is that a stock market helps you trade 
financial instruments like bonds, mutual funds, derivatives as 
well as shares of companies. 
Source: www.kotaksecurities.com
TYPES OF SHARE MARKET
• There are two kinds of share markets.
• Primary markets
• Second markets
Source: www.kotaksecurities.com
Primary Market
• This where a company gets registered to issue a certain 
amount of shares and raise money. This is also called getting 
listed in a stock exchange.
Source: www.kotaksecurities.com
Secondary Market
• Secondary market transactions are referred to trades where 
one investor buys shares from another investor at the 
prevailing market price or at whatever price the two parties 
agree upon.
Source: www.kotaksecurities.com
HOW TO INVEST IN SHARE MARKET
• First, you need to open a trading account and a demat account 
to invest in share market. This trading and demat account will 
be linked to your savings account to facilitate smooth transfer 
of money and shares.
Source: www.kotaksecurities.com
What are Financial Markets?
• Financial markets, from the name itself, are a type of 
marketplace that provides an avenue for the sale and purchase 
of assets such as bonds, stocks, foreign exchange, and 
derivatives. 
Source: www.kotaksecurities.com
FINANCIAL INSTRUMENTS TRADED IN 
A STOCK MARKET
• Below are the main four key financial instruments that are 
traded in Stock market:
1. Bonds
2. Shares
3. Derivatives
4. Mutual Fund
Source: www.kotaksecurities.com
TYPES OF FINANCIAL MARKETS
Stock market
• The stock market trades shares of ownership of public 
companies. Each share comes with a price, and investors make 
money with the stocks when they perform well in the market. It 
is easy to buy stocks.
Source: www.corporatefinanceinstitute.com
Bond market
• The bond market offers opportunities for companies and the 
government to secure money to finance a project or 
investment. In a bond market, investors buy bonds from a 
company, and the company returns the amount of the bonds 
within an agreed period, plus interest.
Source: www.corporatefinanceinstitute.com
Commodities market
• The bond market offers opportunities for companies and the 
government to secure money to finance a project or 
investment. In a bond market, investors buy bonds from a 
company, and the company returns the amount of the bonds 
within an agreed period, plus interest.
Source: www.corporatefinanceinstitute.com
Derivatives market
• Such a market involves derivatives or contracts whose value is 
based on the market value of the asset being traded. The 
futures mentioned above in the commodities market is an 
example of a derivative.
Source: www.corporatefinanceinstitute.com