The primary market is concerned with the floatation of new issues of shares or bonds. The firmsfloating new issues to raise funds may be new companies or existing companies planning expansions.The primary market is where securities are created. It’s in this market that firms sell (float) newstocks and bonds to the public for the first time.The important thing to understand about the primary market is that securities are purchaseddirectly from an issuing company.
The secondary market commonly referred to as the “stock market.” This includes the New
York Stock Exchange (NYSE), Nasdaq and all major exchanges around the world. The defining
characteristic of the secondary market is that investors trade among themselves.
That is, in the secondary market, investors trade previously issued securities without the
issuing companies’ involvement.
