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Capital markets are the physical and electronic markets where equity and debt securities, commodities, and other investments are sold to investors.
When you place an order through a brokerage firm, trade online, or use a dividend reinvestment plan (DRIP), you're participating in a capital market.
Corporations use capital markets to raise money through public offerings of stocks and bonds or private placements of securities to institutional investors, such as mutual fund companies.
The markets in which equity is raised and long-term loans (over one year) are originated and traded.These include the stock market,the bond market,and the primary market. The primary market is any market in which the original issuer receives money, such as an investment house that purchases all securities for an original issue and then resells them on the stock market. Short-term debt instruments, for one year or less, are sold in the money markets, not the capital markets.