Assets can be classified into two categories basically:
a. Financial Assets. Financial assets are nonphysical assets, such as securities, currencies, deposits, bonds, stocks, etc., whose value is derived from a contractual claim.
b. Physical Assets. Physical assets are the tangible assets with a material existence with economic, commercial, or exchange value, such as commodities, real estate, etc.
The markets on the other hand can be classified on different bases:
a. On the basis of time of delivery. On this basis, the markets can be classified into:
i. The Spot Market. The spot market is the market where there is immediate delivery of financial as well as physical assets.
ii. Forwards/Futures Market. It is the market where the contracts are entered today for some agreed-upon future date.
b. On the basis of seller. On the basis of the seller, the markets can be classified into:
i. Primary Market. A market is called the primary market when the issuer is the seller of the financial instruments. For example, the IPO is issued in a primary market first.
ii. Secondary Market. It is the market, where the investor or the holder of the financial assets is the seller. A normal stock exchange, where the securities are traded between the buyer and the seller is an example of the secondary market.
c. On the basis of maturity of instruments traded. On the basis of maturity, the markets can be classified as:
i. Money Market. If the maturity of the instruments (especially debt instruments) is less than one year on the date of its issuance, it is called a money market instrument.
ii. Capital Markets. The markets, where instruments whose maturity is more than one year are traded are called capital markets.
d. On the basis of type of securities. On the basis of type of securities, the markets can be classified into:
i. Traditional Markets. These are the markets that deal in traditional securities like debt, equity, funds, etc.
ii. Alternative Markets. These are the markets that deal in the alternative form of investment such as private equity, securitized debt, hedge funds, etc.