Securities available for the first time are offered through the primary securities markets. The issuer may be a new company or one that has been in business for many years. The securities offered may be a new type for the issuer or additional amounts of a security used in the past. The issuer of the securities receives additional funds through these markets.
Once new issues have been purchased by investors, they change hands in the secondary markets. In this market existing securities are simply being transferred between parties, and the issuer is not receiving new funds. After their purchase in the primary market, securities are traded subsequently in the secondary markets.
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