Question

What are the differences between primary and secondary markets?

Looking for a type-in answer

class of finance

Answer 1

Ans:- Primary market is the place where the firms and company issue their stocks or bonds for first in public which is known as IPO (Initial Public offering) whereas Secondary market is the place where investor or traders trade the stocks or bonds which they already own or in other words the secondary market is nothing but the stock market.

Primary market is also known as the New Issue Market whereas the Secondary market also called as after the issue market.

In the primary market, stocks are issued for the first time whereas in secondary market stocks are traded which are once issued in the primary market.

The intermediaries in the primary market are investment banks but in secondary market intermediaries are brokers

In Primary market prices of shares are fixed at Par value whereas in secondary market prices of shares depends on the supply and demand of shares.

This is the basic difference between Primary market and secondary market.