Primary Market

The primary market is where new securities, like stocks and bonds, are created and sold for the first time. Companies or governments issue these securities to raise funds for various purposes, such as expanding a business or financing projects. Investors purchase these new securities directly from the issuer, usually during an Initial Public Offering (IPO) for stocks. The primary market is crucial as it allows organizations to obtain capital, while investors get the opportunity to buy new investments before they are traded on secondary markets, where existing securities change hands.