The primary market is the market in which a security is originated, or first sold after issue. The proceeds of the sale go to the issuer. The secondary market is the subsequent market in which the security continues to trade, as it is passed from one investor to another.
The primary market and the secondary market both constitute the capital market.
Securities generally have two stages in their lifespan. The first stage is when the company initially issues the security directly from its treasury at a predetermined offering price. This is a primary market offering. It is referred to as the Initial Public Offering (IPO). Investment dealers frequently buy initial offerings on the primary market and resell the securities on the secondary market.
A primary market is the main market to which you are selling.A secondary market is an additional market to which you are selling.AnswerA primary offering, such as with a corporate bond, means you are buying it directly from the issuer, at par value, usually. A secondary market is where you sell or buy existing issues. I.E. If you bought a bond last year, now need to get your principal, you can sell it in the secondary market. You may not get par value. If rates are up since you bought the bond, then you will likely have to sell it at a discount to be able to get rid of it. If rates have fallen since you bought it, you could get a premium for it..
Primary Market:- Whenever any company wants to raise money, it can done by floating its shares in the share market. When such shares are issued for the 1st time in the share market, it is called as IPO (Initial Public Offering) and the further issue is called FPO (Follow on Public Offer). Primary market consists of IPO and FPO. Tata steel coming with further issuance of shares is an example of FPO. Secondary Market:- once the shares are listed on the market, they can be traded on the exchange. the market where such trading takes place is called as secondary market. trading on BSE, NSE, Dow Jones etc is an example of secondary market.
No. The stocks traded in the secondary market are considered previously issued securities that do not involve the original issuing company that issued the stock in the primary market. The owners of the stock traded in the secondary market changes when traded and the monetary exchange would be between the original investors from the primary market not the company whose stock is being traded.
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