Capital markets consist of suppliers and users of funds. Suppliers of funds include households and institutions serving them, such as pension funds; life insurance companies; charitable foundations such as colleges, hospitals, and religious institutions; and nonfinancial companies generating cash beyond their needs for investment.
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into: debt securities (such as banknotes, bonds and debentures), equity securities, e.g., common stocks; and, derivative contracts, such as forwards, futures, options and swaps.
Worldwide in the 1990's these securities provided "insurance" on an estimated $16 trillion of financial securities. In 2007, according to the International Swaps and Derivatives Association the notional value of all financial swaps was $587 trillion worldwide. The gross domestic product of the entire world in 2008 was only about $60 trillion.
Financial securities, also referred to as financial instruments or financial assets, is a generic term used to describe stocks, bonds, money market securities (e.g., treasury bills), and other instruments representing the right to receive future benefits under a set of stated conditions.
Securities are basically in three forms; debt securities, equity securities and contracts. Moreover, shares are a type of equity security that comprises the ownership certificate of a corporation. The return of a share investment is the dividend paid by the corporation plus the increase in the market value of the shares.