Before investing, it is always wise to learn the Basics of Stock Market. Stock market systematically includes;
- Primary market
- Secondary market
The primary market provides the channel for sale of new securities. Primary market provides opportunity to issuers of securities; Government as well as corporate to raise resources to meet their requirements of investment and/or discharge some obligation. They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc. They may issue the securities in domestic market and/or international market.
Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. The difference between Primary and Secondary Market is; In Primary Market securities are offered to public for subscription for the purpose of raising capital or fund but in Secondary Market is equity trading venue in which already existing/pre-issued securities are traded among investors.