Difference between primary and secondary market-
- Primary market is deals with first time issue of stocks (IPO)
to the general public for subscription. But secondary market means
stock market or clearing house where securities are traded and
final settlement will be done.
- Prices are fixed in primary market, but in secondary market
prices may vary due to market volatility.
- Primary markets are direct due to new issues of shares.
Secondary market is always indirect one due to many trading
platforms and activities.
- Primary market provides funds to the enterprises for expansion
of business. But secondary market doesn't involve in funding
business.
- Intermediaries are underwriters in primary market. Secondary
market deals with brokers.
- A security can be sold only once in primary market. But in
secondary market it can be sold multiple times in various
portfolio.
- Example- NYSE, BSE, NSE, NASDAQ, LSE all are belongs to
secondary market stock exchange.
Reliance industries limited issue IPO of $ 2 million to
general
Public during Q4 2018 is an example of primary market.
Thank you! All the best for your exam!