secondary market: meaning, definition, pronunciation and examples

The primary market is where securities are created and sold for the first time (e.g., an IPO), with proceeds going to the issuing company. The secondary market is where those already-issued securities are traded among investors, with money exchanging hands between traders, not the original issuer.

No. While stocks are the most common example, secondary markets exist for bonds, derivatives, mortgages, currencies, commodities, and even non-financial items like event tickets, used cars, and collectibles.

It functions as both, but its predominant daily activity is as a secondary market, facilitating the vast majority of trades in existing shares between investors. Primary market activity (new listings) is a much smaller part of its operations.

It provides liquidity, allowing investors to sell their investments and convert them to cash. It also establishes a public market price (price discovery), which is a key indicator of value for the issuing company and for potential investors.

A financial market where existing securities or other assets are bought and sold between investors, rather than directly from the issuing entity.

Secondary market is usually formal / financial / technical in register.

Secondary market: in British English it is pronounced /ˌsɛkənd(ə)ri ˈmɑːkɪt/, and in American English it is pronounced /ˌsɛkənˌdɛri ˈmɑrkət/. Tap the audio buttons above to hear it.