Primary market is a place where a company launches an IPO (Initial Public offering); whereas in Secondary market, outstanding shares are exchanged between sellers & purchasers.
In the Primary Market, the underwriter plays a major role in the successful launch of shares and subsequent price stabilization of a security. Primary Markets cut across exchanges, OTC and the dealer network. In the Secondary Markets, shares of companies are traded based on free interaction of supply and demand. Market Makers (dealers) play an important role in managing liquidity of the Secondary markets. Moreover, Secondary markets are less volatile.
DISCLAIMER: The views expressed in this Blog are my personal views/analysis. It does not represent views of any organization or group, for which I am doing consulting or employment. The purpose of this blog is academic and informative; and is not sale of any product or service. The author does not own responsibility (liability) for any information presented in this blog; as investment information tends to change rapidly.
