Primary and Secondary Markets

For the shares, its possible for investors to buy them from two different sources. From the company itself and then from other investors. First one is called the Primary Market and the later is known as Secondary Market.

PRIMARY MARKET

This is the market where initial shares and bonds are sold by companies themselves directly and hence the proceeds of the same goes to them, the issuer. This is the place where the company gets cash for selling its financial assets

SECONDARY MARKET

This is the place where shares and bonds are bought by investors from other investors. This is the place of high activity when compared to the primary market. It is a organized market for securities. New York Stock Exchange (NYSE), Bombay Stock Exchange (BSE),National Stock Exchange NSE, bond markets, over-the-counter markets, residential mortgage loans, governmental guaranteed loans etc. are some examples.