its broadest sense, any interaction of buying and selling interest for
goods or services. Although
a market is usually thought of as a locality, it is rather the buying
and selling interest that establishes a market and thus the determination
of quotations or prices of actual transactions in goods and services.
are several classifications of markets.
The chief classification is that based upon the kinds of media
traded in, e.g., stock market, produce market, grain market, money market,
cotton market, livestock market, real estate market, wood market, lumber
market, foreign exchange market, etc.
Markets may be formal and organized or informal and descentralized.
When organized, they are usually called exchanges or boards, e.g.,
the NEW YORK STOCK EXCHANGE, CHICAGO BOARD OF TRADE, COMMODITY EXCHANGE,
INC., Minneapolis Grain Exchange.
The markets for unlisted securities, foreign exchange, real estate,
etc., are decentralized. Organized
markets are closed, while decentralized markets are open, i.e., trading
in the former is limited to members of the exchange, while in the latter
trading is open to any buyers and sellers.
may be classified in accordance with the breadth of the demand for various
products, e.g., world, national and local markets.
With the perfection of means of communication, many commodities
now enjoy a world market, e.g., internationals among securities, sterling
and dollar exchange, wheat, cotton, wood etc.
A national market is one in which the goods or services are traded
in by buyers and sellers coming from any part of the country.
A local market is one in which the goods or services are exchanged
only within a restricted area.
are primary and secondary. A
primary market is one located in a center of consumption where large quantities
are available for distribution and stored in warehouses, elevators, or
railroad or shipping terminals.
is thus a primary
market for wheat and other grains.
A secondary market is one near the points of production.
It is the place where commodities are collected and not distributed.
A market in a small prairie town, for example, would be a secondary
market. As applied to securities,
primary markets refers to the markets for new issues of securities publicly
offered through investment bankers (the capital market), and secondary
markets refers to the markets for already outstanding securities after
such issues have been publicly floated.
may also be said to be continuous or discontinuous, not because transactions
occur every second, but because the facilities are available continuously
or discontinuously for trading. A
trading session of the New York Stock Exchange, for example, provides
a continuous market for listed stocks and bonds.
The market for unlisted stocks and bonds may be continuous.
An AUCTION is a discontinuous market.