To make it clear for you to understand better on the bond market, you should first have in mind what these bonds are. Bond is a credit promise or security where the purchaser (holder) believes that an investor will refund the bonds value and interest at maturity in a particular date in the future. While bond market is a monetary market where bonds are traded i.e. sold and bought.

Bonds differ considerably based on terms of the bonds agreement indenture, unlike stocks. Indenture is a legal document that outlines the characteristics of the bond. The reason that each bond is issued differently, it becomes useful to understand the terms of a bond detailed issuance in the bond market before making a step to invest on it. Mostly bonds market precedes with brokers and huge financial originations in an over- the- counter market.

There are various types of the bond market that exist. The bonds are categorized into several groupings by the securities industries and financial Associations (SIFMA).The categories in which bond markets are grouped are:

Corporate-Corporate credit securities are bonds given out by corporations or organizations to enable them make funds for upkeep and daily smooth running’s of their organizations to facilitate greater returns in the future. The corporate credits issued may range from manufacturers, monetary companies to service related corporates.

Government and agency category-In this category of the bond market, the bonds are handout by the government and agency-sponsored initiatives (GSEs).These initiatives are generated by congress to provide loans at a reasonable rate to a particular kind of debtors. Those who can benefit from the bonds include students, farmers and even homeowners and others. GSEs mostly depend on credit financing for the day to day running to be smooth. Some examples of GSEs, which, operate in this manner include-Sallie Mae, Fannie Mae and Federal farm credit system banks.

Municipal- These are debt securities given by towns, states, counties and other governmental initiatives to maintain general operations like schools, hospitals, highways and drainage systems for the public benefits. An important reason to invest on municipal bonds is that it is issued free from taxes in the bond markets.

Assets and Mortgage supported securities-Persons who have an interest in owning mortgage loans can get them from financial institutions. This is because financial institutions are the ones responsible of issuing mortgage credit securities. These are bonds given to borrowers to support them to buy homes or real estate. Just like all other bonds, the main reason behind giving bonds is profit making. This is attained finally when the borrower refunds the bond, making the investor gain the interest paid with the fixed value which cashed at maturity.

Some of the agencies that hand out debt safeties are- Ginnie Mae, which is a government national mortgage Association, Fannie Mae (Federal National mortgage Association and Freddie Mac.

The information will enable you to understand bond markets well, how they are grouped and how they operate. Also, you will know the players who participate to make the bond market a success.