Difference between primary and secondary market
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Answer:
The primary market is where securities are created, while the secondary market is where those securities are traded by investors. In the primary market, companies sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).
Primary Market
The market where a company raises capital for the first time is known as the primary market. Companies issue IPO (initial public offering) in the primary market only. The market offers an opportunity for investors to buy securities directly from the issuing company. By buying securities or stock from the primary market, investors help companies to raise capital.
Secondary Market
Shares that the company issued in the primary market get listed on the secondary market. All the exchanges such as NYSE, NASDAQ, German DAX, and Australian Stock exchange and more come under the secondary market. Secondary markets allow retail investors to invest in the securities and earn a profit. Investors in the secondary market trade between themselves, and there is minimum or no interference of the issuing company.