What is the Secondary Market?
Also known as the Aftermarket, it is a place where investors have the provision of buying/ selling securities amongst other investors. It consists of both debt and equity markets.
Companies first offer their securities in the primary market to those with enough funds and an investment plan. Thereafter, the listing of securities takes place in a stock exchange for trading in the markets.
There are 2 types of secondary markets:
- Stock Exchanges- An auction marketplace where traders haggle over prices for their desired goods. For e.g., National Stock Exchange (NSE) is India's largest financial market.
- Over-the-Counter- Trading is done directly between two parties, without using the platform of a stock exchange.