statista\u00a0<\/span><\/a><\/p>\nMoney Markets<\/b><\/h3>\n A money market is a place where short-term financial instruments are held. It is a short-term market but includes high-quality liquid assets, such as treasury bills, commercial papers, and repurchase agreements. It's also called a cash market because the term \"money\" refers to the amount of money that can be borrowed or lent within the market.<\/span><\/p>\nMoney market rates are typically fixed for the term of the investment and backed by the credit of the issuing entity. They are considered safe assets usually. However, due to some anomalies, there have been incidents that have reflected negative returns.<\/span><\/p>\nHere, investors can only get cash in exchange for their investments. It is usually used for smaller investments and businesses that don't require much money to operate.\u00a0<\/span><\/p>\nDerivatives Markets<\/b><\/h3>\n Derivatives markets are financial markets where securities or commodities that derive their value from other assets are traded. Derivatives are also called \"financial contracts\". They are products, such as futures contracts and options, which represent an underlying asset (for example, a stock, bond, or commodity). There are three types of derivatives:<\/span><\/p>\n\nFutures: <\/b>These are contracts to buy or sell a commodity at a fixed price in the future. For example, if you own gold and want to know how much it will cost you to sell it in three months' time, you would use a futures contract.<\/span><\/li>\nSwaps: <\/b>Swaps are pairs of contracts that enable two parties to exchange cash flows without owning the underlying asset. For example, if you buy 100 shares of a stock at $50 per share and your friend wants to borrow $10 from you for 30 days, then he or she can do so through a swap.\u00a0<\/span><\/li>\nOptions:<\/b> Options give buyers the right but not the obligation to purchase (buying) or sell (selling) any stock on a defined weighted average.<\/span><\/li>\n<\/ul>\n\n\n\nKey differences<\/b><\/td>\n Financial Market<\/b><\/td>\n Money Market<\/b><\/td>\n Derivative market\u00a0<\/b><\/td>\n<\/tr>\n\nNature<\/span><\/td>\n Moderately stable\u00a0<\/span><\/td>\n Stable with low volatility<\/span><\/td>\n Complex, risky and volatile<\/span><\/td>\n<\/tr>\n\nReturn on investment<\/span><\/td>\n High returns due to long-term savings<\/span><\/td>\n Low returns due to short-term savings<\/span><\/td>\n High-risk, high reward due to short-term duration<\/span><\/td>\n<\/tr>\n\nFunction<\/span><\/td>\n Stabilises the economy with long-term savings<\/span><\/td>\n Stabilises the economy by increasing liquidity<\/span><\/td>\n Serves as an effective instrument for hedging (minimises losses)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nLearn more with Imarticus<\/b><\/p>\n
Understand how each market works, and how each market responds and operates in a real-world scenario. Learn investment banking with Imarticus Learning\u2019s extensive course, which takes you through every minute detail through case studies. <\/span>Contact us through chat support, or drive to our training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Delhi, and Gurgaon.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Derivatives markets vs financial markets vs money market. Are there any differences? Overview If you have ever felt confused between...<\/p>\n","protected":false},"author":1,"featured_media":245878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[22],"tags":[3589],"pages":[],"coe":[],"class_list":{"0":"post-247685","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance","8":"tag-derivatives-markets-vs-financial-markets"},"acf":[],"yoast_head":"\n
Derivatives markets vs financial markets vs money market. Are there any differences?<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n\t \n\t \n\t \n","yoast_head_json":{"title":"Derivatives markets vs financial markets vs money market. Are there any differences?","description":"The difference between them and money market investments is that derivatives are not backed by any physical asset such as gold bars or silver dollars\u2014they're just contracts between two parties that have been agreed upon by both sides.\u00a0","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/imarticus.org\/blog\/derivatives-markets-vs-financial-markets-vs-money-market-are-there-any-differences\/","og_locale":"en_US","og_type":"article","og_title":"Derivatives markets vs financial markets vs money market. 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