Capital market and derivative market difference?

The capital market is a broad financial market where long-term securities, such as stocks and bonds, are issued and traded to raise funds for businesses and governments. In contrast, the derivative market specializes in financial instruments whose value is derived from underlying assets, such as stocks, commodities, or currencies, and includes contracts like options and futures. While the capital market focuses on raising capital and long-term investments, the derivative market primarily enables hedging and speculation on price movements. Thus, they serve different purposes within the overall financial ecosystem.