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What Is Primary Market And Secondary Market? July 28 2017Stock Market Trading

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What Is Primary Market And Secondary Market?

In the financial market, new securities are regularly issued to the public. There are numerous financial products and services available to suit the individual needs of the public. These financial products are traded on the capital market, which is classified into two interdependent segments:

·         Primary Market

·         Secondary Market

Let us understand the meaning of both the terms:

Meaning of Primary Market

When the investors invest in securities by purchasing it directly from the public, it is called primary market. In this market, the company sells its securities which can be shares, bonds, etc. to the public for the first time. The company generally sells its securities in the primary market via Initial Public Offering (IPO).

Meaning of Secondary Market

A secondary market is a place where the securities of the companies are traded after they have been offered to the public in the primary market. The price of the securities (shares) keeps on fluctuating and never remains constant. Secondary markets are generally the stock markets like National Stock Exchange (NSE) or Bombay Stock Exchange (BSE).

After understanding the meaning of both the terms, let us understand the difference between primary market and secondary market.

Difference Between Primary Market and Secondary Market

Primary and Secondary market are very different from each other. In the primary market, the buyer can purchase the securities directly from the company when it brings the new issue. However, this is not the case in the secondary market. In the secondary market, the buying and selling of shares are between the investors through stock exchanges. There is no role of issuing company in the secondary market. The primary market becomes secondary market when the shares allotted by the company directly to the investors are listed on the stock exchanges for buying and selling.  

After knowing the difference between the primary and secondary markets, it is important to know who trades in the primary and secondary market.

Who Trades In Primary and Secondary Capital Markets?

The investors in primary and secondary markets are different from each other because they have different expectations and purposes. The secondary market investors purchase the securities only after the holders of security in the primary market sell them. In the primary market, investors invest in companies by applying for the IPO either for long term investment or for listing gains. On the other hand, the secondary market investors include traders and short/long term investors.

Conclusion

Indira Securities is a renowned name in providing financial services. We provide services to investors who are looking to invest in primary market as well as secondary market. By opening a demat account with us, an investor can apply for Initial Public Offering (IPO) and become a participant in the primary market. Not only this you can invest and indulge in regular trading in secondary markets by having a demat account with us. We guide our client on “How to Identify Growth Stocks”.  Reach us via email or call for any further information.

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
REGISTRATION NOS:

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

INVESTORS GRIEVANCE

Jyoti Singh. Email: compliance@indiratrade.com. Call : 0731-4797275