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the main difference between Primary and Secondary market is that in the Primary market the seller is the Company or entity in the form of IPO, whereas in a Secondary market the Buyers and Sellers are the general public in the form of trading.
Primary market is the place where IPO takes place, fresh share been bought by the public. Secondary markets is the one where the shares get traded through selling and buying.
Primary market:
- The primary market is where securities are created. In this market that company sell new stocks and bonds to the public for the first time and it is called as Initial public offer (IPO).
- A primary market is a marketplace where investors and traders can buy a new issue of a security.
Secondary market:
- In the secondary market, investors trade previously issued securities without the issuing companies’ involvement.
- In simple, the secondary market involves buying and selling securities between other investors.
- The secondary market is what people normally call as “stock market” / “Share market” / “Stock exchange”.
Primary market means that the shares were bought from the company through ipo issued by them. I t is like buying a share fresh, that is at first time. It is a deal directly between the company and the share holder. We cannot buy such shares on any day except during the ipo issuing period . We come to know about the ipo through media, such advt in newpapers. Secondary market market is meant for the shareholders who want to sell their shares. For this purpose, they cannot approach the company. They can sell the shares only through stock market or stock exchanges such as nse or bombay stock exchange. In primary market the price is fixed by the demand for the share from the buyers. The secondary market is an outlet to enter the company without getting the shares through ipo.
Primary market is where an IPO is initiated by a company that wants to sell its share publicly for the first time. Any interested investor(usually large scale) can take a DD along with the application form and buy the stocks from the company directly.
Secondary Market is where the shares bought from the primary market is traded within investors and it includes both bulk and retail trade of shares. Usually all stock exchanges like NSE and BSE are secondary markets. The company itself have no role in this trade.
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