Secondary Market
The secondary market is where previously issued financial securities, like stocks and bonds, are bought and sold among investors. Unlike the primary market, where new securities are created and sold for the first time (like an initial public offering), the secondary market allows investors to trade existing securities. This can happen through stock exchanges or over-the-counter transactions. The secondary market provides liquidity, enabling investors to sell their holdings and access cash, while also helping to establish the current value of those securities based on supply and demand.
Additional Insights
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The secondary market is where investors buy and sell previously issued financial securities, like stocks and bonds. Unlike the primary market, where new securities are created and sold to raise capital, the secondary market provides liquidity, allowing investors to trade these securities among themselves. This trading can happen on exchanges, like the New York Stock Exchange, or over-the-counter. The secondary market helps determine the value of securities based on supply and demand and offers investors a chance to adjust their portfolios or cash out their investments without affecting the issuing companies.