Primary Market vs Secondary Market Explained

The stock market consists of two main segments:

Primary Market

The primary market is where companies issue new shares through Initial Public Offerings (IPO) to raise capital.

Secondary Market

The secondary market allows investors to buy and sell existing shares. Stock prices here are determined by supply and demand.

Key Differences

• Primary market = new shares; Secondary market = existing shares
• Company receives funds in primary market; Investors exchange funds in secondary market
• Beginners usually start trading in secondary market

Conclusion

Understanding primary vs secondary markets helps investors know where and how trading occurs in both US and Indian stock exchanges.