Updated on March 7, 2023
A market where already issued or existing securities like stocks, bonds, paper are traded is known as a Secondary market. Securities are traded in the secondary market after they have been issued in the Primary market. In the Primary market, shares are bought directly from the issuer. While in the Secondary market, the company which issued them does not play any part. Trading and investing in the Secondary market is easier and freely prevalent as there is greater information available versus an IPO in the Primary market where not much is known about the company or its promoters.
What are the features of Secondary market ?
Features of Secondary market:
1. In the Secondary market, trading takes place between the buyer and seller and s/he benefits or loses from the trade. While in the Primary market, the proceeds go directly to the issuer.
2. In the Secondary market, it is the buyer or seller who stands to benefit or lose from the trading.
3. Primary market offering is a one-time process, while Secondary market trading is a continuous process of transactions between buyers and sellers.