What Is The Structure Of The Equity Capital Markets?

Within the equity markets, there are two markets: the primary market and the secondary market. In addition, various instruments are traded in the equity capital markets.?

The structure of the equity capital markets refers to the organization and framework through which companies raise funds by issuing shares of ownership to investors. This market serves as a vital avenue for companies to access capital for growth, expansion, or other financial needs. It encompasses various participants, including companies seeking funding, investment banks facilitating the issuance process, institutional investors, retail investors, and regulatory bodies overseeing the transactions.?

Understanding the structure of the equity capital markets provides insights into how companies navigate the process of issuing and trading stocks, the roles of different stakeholders involved, and the regulatory framework governing these activities.

- Preference Shares

These shares get paid dividends before other types of shares. People who own them get paid first if the company gives out dividends. Think of it as an investment where you get paid dividends regularly.

- Equity Shares

When you own these, you own a part of the company. You can vote on important decisions in the company. It's like having a say in how the company runs.

- Futures

It's a deal between a buyer and a seller. The buyer promises to buy something at a set price in the future. It's a way to agree on a price for something in advance.

- Options

Options are like bets based on the value of something else. The value of an option depends on something else, like a stock or a currency. You can bet on different things, not just stocks.

- Swaps

Swaps are agreements where two parties trade things like debts or cash flows. They might trade loans or bonds. It's like exchanging one thing for another.