What is primary market and secondary market?

The primary market is the financial market where new securities are issued to the public and traded for the first time. In the primary market, securities are issued by companies, governments, and other organizations to raise capital. The primary market is also known as the "new issue market."

The secondary market is the financial market where securities that have been previously issued are bought and sold among investors. The secondary market includes exchanges, such as the New York Stock Exchange (NYSE) and the NASDAQ, as well as over-the-counter (OTC) markets. In the secondary market, investors can buy and sell securities that have already been issued and are no longer in the hands of the issuing company.

The primary market and the secondary market serve different functions in the financial system. The primary market is a source of capital for companies and governments, while the secondary market provides liquidity for investors and allows them to buy and sell securities as their needs and circumstances change.