What is the difference between a primary and a secondary market?

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"Primary Market" refers to the initial offering of stocks or bonds to the buying public, as when a previously privately-owned company decides to "go public" by issuing shares of its ownership, or stock, to the public.  In the case of Initial Public Offerings, or IPOs, the stock is sold to...

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the public for the first time, and any subsequent transfer of that stock constitutes what is known as the "secondary market."  

The "Secondary Market," then, refers to the subsequent sell or transfer of stocks and bonds throughout the broader public marketplace through designated exchanges, most prominently, the New York Stock Exchange and Nasdaq.  The stocks bought and sold through these exchanges are no longer in the 'hands' of the original issuing companies, but, rather, are sold from public hands to public hands.

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The difference between a primary and a secondary market is that a primary market is one in which a stock is being offerred directly from a company to investors for the first time.  This happens most commonly during an initial public offer.

In contrast to this, a secondary market is a market in which investors are buying stocks from and selling stocks to one another.  These are stocks that have already been issued by the firm and sold to some investor on the primary market.  When that investor wishes to sell the stock, he or she does so by selling it to some other investor on the secondary market.

The difference, then, is that primary markets involve stocks being sold for the first time by a firm directly to investors while secondary markets involve investors dealing existing stocks with one another.

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What is the key difference between the primary and secondary securities markets?

The primary securities market is the segment of the capital markets where owners of private companies directly sell a part of their stake to investors. This can be done either as an IPO (initial public offering) where shares of the company are offered for the first time, or as an FPO (follow on public offering) where the owners of listed companies divest more of their stake. Once the stock of a company enters the capital markets through the primary securities market, it is traded between market participants in the segment of the capital markets known as secondary securities market.

The difference between the primary market and the secondary market is that in the primary market the owners of the company are the sellers and the investors are buyers. Investors can only buy stock in the primary market. If they want to sell the stock they have bought, it can be done only in the secondary market. The stock of any company is transacted in the primary market only once. All further transactions of the stock are done in the secondary market.

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