capital market

Capital market

The market for trading long-term debt instruments (those that mature in more than one year). Also used in a more general context to refer to the market for stocks, bonds, derivatives and other investments.

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capital market

The market for long-term funds where securities such as common stock, preferred stock, and bonds are traded. Both the primary market for new issues and the secondary market for existing securities are part of the capital market.

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capital market

Any market in which securities are traded. Capital markets include the stock and bond markets. Companies and governments use capital markets to raise funds for their operations; for example, a company may issue an IPO while a government may issue a bond in order to conduct new or expand ongoing activities. Investors purchase securities in the capital markets in order to extract a return and earn profit on the securities. Capital markets include primary markets, such as IPOs that are placed with investors through underwriters, and secondary markets, where all subsequent trading takes place, such as the New York Stock Exchange. Government agencies in different countries regulate local capital markets, though some, especially exchanges, play some role in regulating themselves.