What are Primary and Secondary Markets in Stockmarket?

📈What is the Primary Market in the Stock Market

  • It’s where the companies sell their newly issued shares directly to the public through IPOs (Initial Public Offerings).
  • The money raised helps the company grow and expand its business.
  • It helps them to fund new projects or pay off debts.
  • The company decides the price of the shares, often with guidance from experts called investment banks.
  • After the shares are sold, they move to the secondary market for trading.

📈What is the Secondary Market in the Stock Market?

  • It’s where the shares are bought and sold after the IPO and the primary market.
  • Here, you’re not buying shares directly from the company at the initial price, but buying them from the people at their selling price.
  • Stock exchanges like the NSE and BSE are the key platforms for trading in the secondary market.
  • It allows investors to trade shares freely, providing liquidity and flexibility to both buyers and sellers.
  • In the secondary market, the price of a share is determined by factors such as supply and demand, technicals, emotions, news, etc.

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