StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Financial and Commodity Markets and Their Role in International Trade and Economic Performance - Essay Example

Cite this document
Summary
The paper "Financial and Commodity Markets and Their Role in International Trade and Economic Performance" claims financial and commodity markets play many roles in international economic performance. They are developed to serve 3 major roles - liquidity, information sharing, and risk-sharing…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.9% of users find it useful
Financial and Commodity Markets and Their Role in International Trade and Economic Performance
Read Text Preview

Extract of sample "Financial and Commodity Markets and Their Role in International Trade and Economic Performance"

Stocks are equity instruments mainly issued by corporations for an indefinite time period. Stockholders become the owners of the corporations and play a key role in the decision-making process of the company. Stockholders can buy and sell the stocks in the stock market such as New York Stock Exchange, London Stock Exchange, etc. (Babu, 2012).

Foreign Exchange Market
Foreign exchange market deals in the currencies of various countries such that it provides the mechanism for trading the foreign currencies. The difference between the buying and selling price is called the spread which is the profit of the trader. Foreign currency markets work round the clock thus, minimizing the arbitrage opportunities (Sheeba, 2011).

Derivative Market
Derivatives are the hedging instruments that provide the holders the opportunity to mitigate the risk against the undesired movements of financial securities. Common types of derivatives include forwards, futures, swaps, and options (Brigham and Ehrhardt, 2008).

Commodity Market
The commodity market comprises various commodities such as metals, energy, foods, etc. These commodities are regulated by the commodity exchanges such as New York Mercantile Exchange (NYMEX) and Chicago Mercantile Exchange (CME).

Financial markets and commodity markets are the major indicators of international economic prosperity such that in times of booming periods, the prices of the instruments traded under these markets are at their peak whereas, in times of depression, these prices steeply decline. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The organization of financial (debt, equity, foreign exchange, Essay”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1615490-the-organization-of-financial-debt-equity-foreign-exchange-derivative-and-commodity-markets-and-their-role-in-international-trade-and-economic-performance
(The Organization of Financial (debt, Equity, Foreign Exchange, Essay)
https://studentshare.org/finance-accounting/1615490-the-organization-of-financial-debt-equity-foreign-exchange-derivative-and-commodity-markets-and-their-role-in-international-trade-and-economic-performance.
“The Organization of Financial (debt, Equity, Foreign Exchange, Essay”, n.d. https://studentshare.org/finance-accounting/1615490-the-organization-of-financial-debt-equity-foreign-exchange-derivative-and-commodity-markets-and-their-role-in-international-trade-and-economic-performance.
  • Cited: 0 times

CHECK THESE SAMPLES OF Financial and Commodity Markets and Their Role in International Trade and Economic Performance

Key Roles Performed by Financial System in the Economy

?? (Investopedia, 2011) A firm level financial system refers to the financial system followed by companies in order to track their financial performance.... Financial markets 3.... In simple terms, financial system can be called as the system that keeps the flow of money between people and institutions.... financial intermediaries are the first component of financial system.... As the name signifies, financial intermediaries act as an intermediary or channel between two parties....
11 Pages (2750 words) Essay

Role and Functioning of Stock Markets

The secondary market facilitates trade between buyers and sellers of stock and thereby enabling the investors to reach the true price of the stock or commodity.... Primary Market and its role: Primary market is the market in which newly listed companies issue their shares to be traded for the first time, changing hands from the newly listed company to the investors, mostly these first time investors are institutional investors for example pension funds, investment banks, credit unions....
11 Pages (2750 words) Coursework

Role of Currency Options in International Trade

Currency Options and their role in international trade Course Number: Date Due Introduction Any business enterprise can benefit greatly through proper management of their risk.... The international trade is finding its way in society and people have actively been involved in the same and this has led to the emergence of new market models such as market coupling are being discussed and this has made it easier for cross-border trading.... On the other hand, the international trade implies that different rules and procedures must be followed and this has led to a change in the trading system that bring on board a number of challenges that require adaptation into existing risk management mechanisms....
11 Pages (2750 words) Essay

Globalization and Internation Financial Crisis

The paper critically evaluates the supposition of globalization's role in international financial crisis and assesses the question whether international financial stability is feasible in an increasingly globalised economy.... ? It is theorized that increasing globalization has played a role in creation of a wave of international financial crises in contemporary times (Schmukler and Vesperoni, 2006).... ?According to Mishkin (2009), the financial aspect of globalization has three dimensions: geographical aspect of financial globalization refers to mobility of capital from one country to another, functional aspect of globalization relates to capital markets which are compartmentalized through shifts in money markets and stock markets....
7 Pages (1750 words) Essay

Facilitating the Flow of Money

In today's increasingly complex and volatile environment, the Treasury is tasked with managing a broader range of financial and operational risks that confronts the economy as well as companies that have their eyes set on domestic and global expansion.... Its long-held domain includes the management of liquidity and risk exposures in foreign exchange and interest rates and it is only natural that, when the environment posed an increased amount of risks, the Treasury was called upon to manage a broader range of financial and operational risks....
13 Pages (3250 words) Case Study

Derivatives: Their Economic and Financial Rationale

This work called "Derivatives: Their economic and Financial Rationale" describes issues concerning futures and options, as well as to the other types – namely, swaps and forwards.... The issue sometimes raised is whether derivatives are necessary, because of the corporate financial disasters and scandals that have hogged news headlines worldwide, or whether they serve some social or economic purpose.... In contrast to the spot market where payment and delivery are completed on the day the trade is arranged, in futures and options markets payment and delivery are postponed to a specified or optional date in the future at an arranged price....
23 Pages (5750 words) Coursework

Opportunities of the Commodity Markets

The paper provides a detailed description of the commodity markets.... An individual can easily gain in the commodity markets by trading these co-dependent relationships (Carter and Smith 112).... The major commodity markets are in the USA and the United Kingdom.... Commodities market requires the existence of established standards opposed to spot markets where inspection of commodities is involved.... There the purchase and sale of raw products occur: they deal with soft (oil, rubber, and gold) and hard (agricultural products and livestock) commodity....
11 Pages (2750 words) Research Paper

Explanation of High-Frequency Trading

The strategy entails capturing profits that can be as low as a fraction of a pence for each trade (Menkveld, 2013, p.... The strategy does not entail taking positions in equities or commodities as the process seeks immediate profits using the volume of the trade times the possible return (Jarrow and Protter, 2011, pp.... Today's equity markets operate in a highly sophisticated computerized environment that uses varied approaches and technical trading tools (Narang, 2013, p....
11 Pages (2750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us