The first type of securities market are the primary markets. Primary markets deal with the securities issued for the first time, that is, the initial public offering. Governments, companies and institutions in the public sector obtain finances from the sale of new bond or stock issue making the primary markets a very important source of capital. Primary markets are important in understanding the investment business because they facilitate the formation of capital in the economy. The financial instruments like shares are purchased directly from the company offering such shares.
Secondary markets form the second securities market where the bonds, options or stocks issued previously are traded on a daily basis. The secondary markets enable investors to purchase the financial instruments from other investors in the market directly. The secondary markets are useful in understanding the investment business since it shows how various securities changes hands between the investors in the capital markets. International markets are important in facilitating trading of shares, bonds and options across the borders of various countries all over the world. This enables individuals to invest in all parts of the world. The international markets allow free trading of financial instruments all over the world.
Globalization of financial securities markets is important in the sense that it allows investors to invest in all parts of the world. The globalization of securities markets helps to diversify the scope of investment in the market. The investors will have a wide market to invest in. This also encourages trade among countries as well as boosting international relations. The study of globalization of securities markets is also important in providing many types of financial instruments to the investors in different stock markets of the world.
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