Difference Between Primary and Secondary Market
Stock market is generally divided into two types of market i.e., Primary market and Secondary market. Let’s have a detailed read about them.
Primary Market
A primary market is a place where various companies issue a fresh issue of shares to the investors for the first time to fulfil their necessary long-term funds for various purposes. Issuing an IPO comes under the primary market. In primary market, shares are directly traded between the company owners and traders/investors.
Secondary Market
After the issuing of an IPO, those IPO shares are listed on stock exchanges and are traded directly between the traders/investors. Secondary market has high liquidity.
Difference Between Primary Market and Secondary Market
Criterion | Primary Market | Secondary Market |
Another Name | New Issue Market (NIM) | After Issue Market (AIM) |
Role | To issue shares for the first time. | Shares are traded after the public issue. |
Purchasing Type | Direct Purchase | Indirect Purchase |
Intermediaries | Investment Banks | Brokers |
Share Price | Fixed | Variable depending upon the supply and demand |
To Trade or invest in both primary and second market, an account is required. You can open your account in any of these stock brokers.
1. To open your account with Alice Blue
2. To open your account with Stoxkart
3. To open your account with Angel Broking
4. To open your account with Zerodha
5. To open your account with Upstock
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