What is Shares Trading?
In a share market, shares are bought and sold. The stock market is a share market, however besides shares of companies, other instruments like bonds, mutual funds and derivative contracts too are traded in the stock market.
What is Primary Market?
A company enters the primary market to raise funds. It is in the primary market that a company gets registered to issue shares to the public and raise money. Companies generally get listed on the stock exchange through the primary market route. In case a company is selling shares for the first time, it is called an Initial Public Offering or IPO, after which the company becomes public. While going for an IPO, the company has to provide details about itself, its financials, it promoters, its businesses, stocks being issued, price band and so on.
What is Secondary Market?
In the secondary market, investors trade already listed securities by buying and selling them. Secondary market transactions are transactions where one investor buys shares from another at the prevailing price. Normally, these transactions are conducted through a broker. Secondary market offers investors a chance to sell all its shares and exit the financial market. For example: Shares of Tata Steel are trading in the market at INR711 a share. An investor can buy these shares at current market price and will get part-ownership of the company and become a shareholder.