Updated on January 15, 2024Table of Contents
The secondary market is a market where financial assets, such as stocks, bonds, and derivatives, are traded between investors. It is also known as the over-the-counter (OTC) market.
What is the secondary market?
The secondary market is where investors buy and sell previously issued securities like stocks and bonds. It provides liquidity and price discovery for these assets.
Why is it called the secondary market?
It’s called the secondary market because securities are traded between investors after their initial sale in the primary market.
What is an example of a secondary market?
Stock exchanges, like the New York Stock Exchange (NYSE) or India’s National Stock Exchange (NSE), are examples of secondary markets.
How does the secondary market work?
In the secondary market, securities change hands between investors, with prices determined by supply and demand, helping to provide liquidity to the market.
What is the difference between primary and secondary markets?
In the primary market, companies issue new securities directly to investors. In the secondary market, existing securities are traded among investors.
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