In financial world, a market has several meanings. Usually market refer to varieties of institutions, systems, procedures, infrastructure and social relations where parties engage in exchange of goods and services. Market greatly rely on two parties, the buyer and seller, the seller offer goods and services to buyer in exchange of money. We can said that market is a place where prices of goods and services are established.
In an emerging economy, market ease trade and allow resources distribution in the society. Market can be differ from one another on the basis of products sold, governments regulations, selling process, duration, size, buyers targeted, subsidies, taxes, legality of exchange, price ceilings, minimum wages, intensity of peculation, liquidity, exchange asymmetry, concentration, geographic extension, relative prices and volatility. The geographic boundaries of market vary but same rules apply throughout.
Market facilitate the exchange of goods and services between buyer and seller. The market can be physical or virtual. A physical market such as retail outlet or a grocery store where buyer and seller meet face to face, while in retail market, there is no direct physical contact between buyer and seller, such as Amazon, eBay. Aside from virtual and physical market, there are other types of markets where parties meet to perform their transactions.
Black market – It is kind of market where goods and services are exchanged illegally. The buy and sell transactions occur without the knowledge of regulatory agencies and government. Worldwide many black markets exits in order to avoid current tax laws. Black market exist in both developed and developing countries. In developing countries, there is shortage of goods and services in economy, thus black marketers step in and fill the emptiness. The sale of concert ticket on black with inflated price is an example of black market in developed countries. Usually black markets trade in cash transactions or from of money that are hard to track.
Auction Market – website like eBay and physical market of homes and livestock are most common auction markets where items for sale are end up to the highest bidder. An auction market involves many people for sale and purchase of specific goods. The purchasers try to top each other for purchase price.
Financial Market – it refer to a place where currencies, securities, and bods are traded between the two parties. Financial market is basis for capitalistic societies because it provides liquidity and capital formation for businesses and people. Financial market can be virtual and physical. Financial market include foreign exchange market, stock market, bond market and exchanges such as NASDAQ, New York Stock Exchange, the TXM Group and the LSE.