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Explain in details....Contrast the Primary and Secondary markets and summarize their respective operations.

Explain in details....Contrast the Primary and Secondary markets and summarize their respective operations.

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Answer #1

Table showing difference between primary market and secondary market

Primary market Secondary Market
Primary market refers to market where securities of company are issued for first time. For eg IPO. Secondary Market refers to market where already issued securities are traded i.e between two traders
Here company is seller and public is buyer Here trading is done among public
Main aim is to provide company a platform to raise money, create brand image etc Main aim is to provide liquidy to the Investor
Underwritters are intermediary in primary market Brokers are intermediary in seconday market i.e securities are bought and sold through brokers
Price of the shares are fixed by the company hence it does not fluctuate more Prices in secondary market fluctuates heavily
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