What is Primary Market and Secondary Market?

By Angel Broking | Published on 1st March 2016 | 557

To begin your investment journey in the equity share market, you first need to know about the primary & secondary markets. Angel Broking presents fun-to-learn 60sec videos to help beginners learn about primary & secondary markets and grasp the basics of equity & share-trading.

By definition, “Primary market is where securities are created”, while, “Secondary market is what people usually refer to as the “stock market”. Here’s an easy-to-understand explanation.

Transcript :

What are Primary & Secondary Markets? As a new investor in the stock market Vinod wants to understand the Primary & Secondary Markets. His friend Ashish an active trader with Angel Broking explained: the primary market is where the stocks are created and secondary market is where the stocks are traded When a company decides to go public for the first time by raising an IPO, it is done in the primary market. Here a company sells its shares directly to the investors. After the shares are bought for the first time in the primary market, traders buy and sell these shares among themselves in the secondary market In the secondary market, the issuing company is not involved directly in any transaction. So, in the primary market Vinod will buy shares directly from a company while in the secondary market, Vinod will buy or sell shares to another trader. With a better understanding, Vinod is now ready to trade with Angel Broking as his trusted partner.