Jump to content
  • 0

Markets


Predrag V
 Share

Question

1 answer to this question

Recommended Posts

  • 0

Hi Predrag, thanks for coming here. 

The basic market concepts are the primary and secondary markets. The former term refers to a market where the securities are first being issued. On the contrary, the latter is where the majority of stock market trading is taking place. In the secondary markets, investors are trading securities that they already own. 

In the stock market, the primary markets are mainly used by companies to sell their stocks for the first time. This can be done through the initial public offering (IPO), private placement or preferential allotment. 

In primary markets, securities are always purchased directly from the issuer. On the contrary, the owner of security can then trade it on a secondary market after purchasing it in the primary market. Therefore, transactions in the secondary markets are of a more trading purpose. 

The most popular secondary markets are exchanges e.g. NASDAQ, NYSE, London Stock Exchange etc.

One of the key differences between these two is that in the primary markets prices are created by the issuer of a security. On the other hand, the market forces (buyers and sellers) are creating supply and demand in the secondary market, hence the prices are made by the market itself. 


 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...