Markets & trading
The primary market creates and sells new securities to raise capital; the secondary market lets investors trade existing securities with one another. The cash recipient differs between them.
Make it click
A new ticket bought from the organiser funds the event. The same ticket later resold between attendees changes ownership without sending that resale price to the organiser.
Now put that into markets
IPOs, bond issues and rights offers are primary transactions. Exchange and over-the-counter trading after issuance is secondary.
Underwriters and placement processes help distribute primary issues; secondary liquidity helps investors value and transfer them. The two markets influence each other.
Ask whether securities are newly issued, who sells, who receives proceeds and whether the share or debt count changes.
A company does not receive cash every time its share trades, although the secondary price can affect future financing and incentives.
Takeaway
