Primary market vs secondary market: what’s the difference?
The secondary market is often associated with the primary market, and it’s important to establish the differences between the two.
The primary market is where securities like stocks and shares are created, and it’s where they’ll initially be listed. Often, the primary market is saturated with institutional investors like banks, funds and other corporate entities.
The secondary market is where securities can be freely bought and sold between retail traders and investors – and it follows the primary market. Anyone with a trading account or investment account can take a position on a securities price movements on the secondary market – and as previously said, it’s where the majority of financial transactions take place.