Financial markets handbook
Independent working reference. Product and feature names mentioned are trademarks of their respective owners. No investment advice.
181 topics in 15 blocks, from asset classes to behavioral finance. Each topic states the definition and the typical mistake, plus, depending on the topic, use, opportunities, risks or interpretation.
Map of the financial market
The top-level structure: where does an instrument sit, and what does it border on? The detail level follows in the knowledge blocks.
- MONEY MARKET (maturity < 1 year); overnight deposits, term deposits, commercial paper, T-Bills, repos, money market funds
- CAPITAL MARKET
- EQUITIES (equity capital); common/preferred shares, large/mid/small cap, sectors, REITs, ADRs
- BONDS / FIXED INCOME (debt capital); by issuer: sovereigns, corporates, banks (Pfandbriefe, German covered bonds), supras · by maturity: short-dated bonds (under 3y) for liquidity with little interest rate risk, intermediate maturities (3-7y) as the core of a bond portfolio, long-dated bonds (over 10y) as a rates bet or liability matching with high duration · by structure: fixed, floaters, zero coupon, inflation-linked, subordinated, convertibles, perpetuals, CoCos · by credit quality: investment grade and high yield
- HYBRID / SECURITIZATION; convertible bonds, MBS/ABS, structured products, certificates
- DERIVATIVES MARKET (derived instruments); futures, forwards, options, swaps (rates/FX/credit), swaptions
- FOREIGN EXCHANGE MARKET (FX); spot, forwards, FX swaps, FX options, NDFs
- COMMODITIES MARKET; energy, metals, agriculture; access mostly via futures/ETCs
- ALTERNATIVE / PRIVATE MARKETS; private equity, private debt, real estate, infrastructure, hedge funds, crypto/digital assets
- VEHICLES & WRAPPERS (access routes); funds (active/passive), ETFs, ETCs/ETNs, certificates, ELTIFs, discretionary mandates
- INFRASTRUCTURE & VALUATION; exchanges/OTC, clearing, custody, indices/benchmarks · rating agencies (S&P, Moody's, Fitch, Scope), fund ratings (Morningstar) · data providers (Bloomberg, LSEG, FactSet, Morningstar, MSCI)
The knowledge base: 181 topics in 15 blocks
- Block A · Asset classes (topics 1-12)
- Block B · Fixed income segments (topics 13-33a)
- Block C · Equity segments & styles (topics 34-46)
- Block D · Funds & vehicles (topics 47-58)
- Block E · Derivatives (topics 59-71)
- Block F · Foreign exchange (FX) (topics 72-78)
- Block G · Macro & business cycle (topics 79-94)
- Block H · Metrics, valuation & risk (topics 95-117)
- Block I · Ratings & research (topics 118-130)
- Block J · Market structure & trading (topics 131-140)
- Block K · Portfolio & strategy (topics 141-147)
- Block M · Risk management & risk analysis (topics 151-165)
- Block P · Corporate finance & primary market (topics 188-194)
- Block Q · Financial mathematics basics (topics 195-200)
- Block R · Behavioral finance (topics 201-205)