Basic Financial Terms: Understanding The Difference Between Primary and Secondary Share Market

Share Market Basics: The primary and secondary markets are vital components of the Indian stock market. Both markets have different sales volumes, transaction volumes, and populations, among other things. 

Primary and Secondary Markets 

In the stock market, the primary market is where companies or governments first issue and sell new securities to raise capital. This process includes initial public offerings (IPOs) or secondary offerings of stocks or bonds. Investors buy these securities directly from the issuing company. In contrast, the secondary market is where previously issued securities are purchased and sold by investors without the involvement of the issuing company. This market gives investors liquidity by allowing them to trade existing securities, such as stocks and bonds, among themselves.