What is the difference between Primary and Secondary Markets?

The primary market is where new stocks or bonds are issued and sold directly to investors. When a company goes public through an Initial Public Offering (IPO), the shares are sold in the primary market. After that, they are traded in the secondary market (stock exchange).

The secondary market is where investors buy and sell existing securities issued by companies. Unlike the primary market, where new securities are issued and sold for the first time, the secondary market allows investors to trade securities that have already been issued, such as stocks and bonds, among themselves. This market ensures you can easily buy or sell securities and helps establish their market value.