We will know about the Primary Market vs Secondary Market.
Primary Market:
It is the market place where new shares are issued. Underwriters helps the company to issue the new share through the IPO. Similarly, underwaters collects money from the investors and handover it to the company.
Secondary Market:
It is the market place where formerly issued securities are traded. Brokers helps the investors to buy and sell the stock they have. Here, securities can be sold multiple times.
Hence, these are the meaning of Primary Market and secondary market.
Primary Market vs Secondary Market
Following is the difference between two market
| Primary Market | Secondary Market |
|---|---|
| 1. Market place for new share is Primary Market. | 1. Market place where formerly issued securities are traded is secondary market |
| 2. Securities can be sold only once. | 2. Securities can be sold multiple times |
| 3. buying and selling of securities between company and investors. | 3. Buying and selling of securities between investors only. |
| 4. Underwriters helps buyer and company for transaction of securities. | 4. Brokers helps buyer and seller for transaction of securities. |
| 5. Fund transfer from buyer to issuer | 5. Fund transfer from buyer to seller of securities |
| 6. The object of the primary market is to make the financial capital available to make new investments in building, equipment, and stock of necessary goods. | The Objective of the secondary market is to provide liquidity to the purchaser of security. |
Hence, these are the differences.
Other Important Links:
Meaning of Primary Market? : CLICK HERE
Meaning of Secondary Markets: CLICK HERE
