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Difference between primary market and secondary market

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Difference between primary market and secondary market

Difference between primary market and secondary market. The most popular another term of “Primary market” is “Market in art valuation”. The primary market is the significance part of capital market. It usually deals with issuing of new securities. Primary markets make long term instruments through which corporate entities raise funds from the capital market. Secondary market also can be called as “aftermarket”. Basically, The secondary market is a place where investors buy and sell securities that they already own. Example of the secondary market such as the New York Stock Exchange – NYSE and the NASDAQ.

Difference between primary market and secondary market

Primary market

Subject

Secondary market

i. Seller of the securities is the issuer of      the securities

 

Holder/

issuer

i. Seller of the securities is the holder of the security
ii. Primary securities are typically call initial public offerings (IPOs)

 

Name ii. Secondary securities are outstanding securities
iii. Primary issues of securities occur relative infrequently

 

Frequency iii. Secondary securities occur frequently
iv. Primary securities previously did not exist in the market

 

Existency iv. Secondary securities are outstanding
v. Gain from secondary transaction is not possible in the primary market

 

Gains v. Investor can gain from the secondary market
vi. Original issuer remains unaffected due to the price the changes Effects vi. Investors will be affected by the price changes

 

According to their operation, the securities markets are categorized as primary market and secondary market. Each of these markets can further be divided into money market and capital market on the basis of economic unit issuing the securities. The following Table considers each of the major segments of the securities markets and the functions they perform.

Capital market Money market
Primary market

 

   A
   B
Secondary market

 

   C
   D

Figure – Segment of securities market

 

 

 

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Difference between primary market and secondary market
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Difference between primary market and secondary market
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Difference between primary market and secondary market.According to their operation, the securities markets are categorized as primary market and secondary
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BBALectures.com
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