Difference Between Primary Market and Secondary Market: The most popular another term of “Primary market” is “Market in art valuation”. The primary market is a significant part of the 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.
The 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. Here, we discuss the Basic Functions of the Secondary Market.
Example of the secondary market such as the New York Stock Exchange – NYSE and the NASDAQ.
Read Also: The Structure of the Secondary Market
Page Contents
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 called initial public offerings (IPOs) | Name | ii. Secondary securities are outstanding securities |
| iii. Primary issues of securities occur relatively 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 the secondary transaction is not possible in the primary market | Gains | v. An 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 the primary market and secondary market. Each of these markets can further be divided into money market and capital market on the basis of the economic unit issuing the securities.
Related Articles on Money Market and Capital Market.
- Financial Market and its Characteristics
- Money Market Instruments and Characteristics
- Capital Market Characteristics and Instruments
The following Table considers each of the major segments of the securities markets and the functions they perform.
| Capital market | Money market | |||
| Primary market |
|
| ||
| Secondary market |
|
|
Figure – Segment of the securities market
Important Links
Leave a Reply